Happy new year to all! I hope 2023 ended on a positive note for everyone and I really do look forward to what this year brings.
Going into tomorrow, I'm still waiting for SPY to turn back down below 470 and to be contained by 480. If we end up breaking out, we might see a continued melt up or a liquidity sweep upward before continuing back down. I started adding SOXS last week to play the eventual pullback as semiconductors are already at new all time highs. Weekly charts are extremely extended across the board with 9 straight weeks of green. At this point, it's just dollar cost averaging into my short positions until a pullback occurs.
458 looks like a good area for SPY on the first retest and depending on how price reacts there, I might elect to deploy some of my free capital into 3x bull positions for another attempt upward. I'm still going into this year with a bearish bias for the 1st quarter (at least). If we see a stronger correction toward SPY 440 or even 420 and hold, I would likely flip bullish down there. Odds favor a rally into the end of the year during election years, but as we've seen the last couple of months, anything can happen. We've seen technicals pushed aside with this recent melt up, but that can only continue for so long before something breaks. It's my opinion that we've been rallying on speculation and hype and once the rumors die down, investors will return to technicals in order to establish fair value areas.
This new year is likely to see a lot of volatility and I look forward to trading it. I think one area that I can improve is devoting more capital to short-term trades and less to the medium-term swings (1 month or more). These short positions that I entered at the beginning of November have really hurt, and while I do think that I'll have an opportunity to profit off them, the real money maker these last two months was on the bull side.