Pullback? What pullback?
The markets kept defying calls for a pullback. And that is despite overstretched overbought levels on worrying technicals. However that is nothing surprising. That is how the market sucker punches the unsuspecting. When you least expect it to and when you thought that the market is not pulling back or rebounding after all, it does. Some call it momentum much like a car slowing down. The question is 'Is this a slowing down before picking up speed again? Or is it a slowing down to reverse direction?'
I am undecided at the moment. That is how tricky this market is. So I am not frontloading any moves. Rather I am being ultra defensive and hedged so that any quick downsides will not catch me offguard. And the risks are more to the downside than up. As such, in the imminent pullback, I will be watching the price action first before deciding on risk positioning.
A three wave move pullback will increase the chances of this rally continuing which will see me positioning more towards the upside and removing hedges. A five wave move down will make me cautious and leave the hedges on as well as continue the defensive posture. Considering the high cash positioning, I might not trim any more positions unless necessary.
So to answer the topic, I might not be adding on a five wave pullback. A three wave pullback might see me considering AMD which seems more bullish technically.
Disclaimer: Please kindly do your own due diligence as this is a sharing article and in no means financial advise. I am just sharing my opinions and thoughts.
Thanks for reading my commentary. Hope it helps!
Stay safe! 😊
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