Trying to issue some Fund guidance here. It's like we have a double top and an aggressive move would be to try to anticipate the Fund units dropping below the SMA's.
Here's the KVB MLB Contrarian Fund after Friday with links to each play...
Here's the chart and I have several things to go over here. First I want to highlight in yellow what appears to be a double top, or a bit of a messy sinlge top. I'm not so sure we've dipped enough to represent a double top and if we indeed haven't then there is still a dip to come in the messy single top.
I also highlighted in yellow a previous "douple top" in that earlier range to show that plays can pass before the double top's predicted dropping effects occur. Of course then we had more of a "V pattern as well...
So you can see I'm trying to "Force" a bit of a double top here and an Aggressive Trader might consider fading the Fund. A more conservative approach would be to wait for a more confirming pattern to emerge. That would have been wise on the latest bull run as there have a been a few potential opportunities to jump the gun here and they all failed.
Also, some will wait until the units actually fall thorugh the SMA 20 to sell or go neutral. I might do a blend here.
We are a little more sideways here and I'd like to point out one more part of the chart above. That most recent rise from the last bounce off the SMA 10 to this recent bounce there could very well constitute a rising "gap" in the market that we could expect to get covered on the negative side.
Here's a zooom shot. We currently rest on or just below the SMA 10 but i'm talking about the previous two touches on that red line...
The presence of this gap gives us some urgency to think about changing our outlook here and taking 50% of the unit size out of the Fund. Sure, we are predicting, or trying to predict, a drop through the SMAs. We could see a small rize before coming back down, but it is my feeling that we will be entering a more choppy, volatile market in the near term. We are watching closely because if indeed that is a gap to be filled, perhaps we can open the Aggressive Trader side to SBR and try to profit on the fade. But we'll cross that bridge when we come to it.
There might additional analysis in the Report thread, but for now the outlook is a negative and sideways market. We could float here before a drop, we could float after a drop, but wither way there should be some volatility once the market does pull back...