Is This The Best or Worst Time To Have Market Conviction?

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“The best lack all conviction, while the worst are full of passionate intensity.” William Butler Yeats

In Yeats’ poem, “The Second Coming,” composed in 1920, the line above is written as a commentary of his time. He suggests a dissociation between the best (in his case the intellectuals) and the worst (the reactionaries).

At the risk of sounding immodest, I find that because of (or maybe in spite of), all of my experience and knowledge I am facing a lack of conviction concerning the current market.

So, if that makes me one of Yeats’ best, what in market terms would be one of Yeats’ worst?

One could say that one of the worst is Ackman and his passionate commitment to Valeant Pharma as he doubled down while the stock dropped precipitously. I’d rather say that he himself is clearly not one of the worst. He is worth billions.

However, we could take a lesson from the dangers of adding to a losing positon for starters. Furthermore, we could also let the uncommitted off the hook. For now, that may be the best instead of the worst thing.

Last night I wrote about the possible reversal patterns that needed to confirm in both the 20+ Year Treasury Bonds (TLTs) and the US Dollar ETF UUP. Neither confirmed, meaning neither reversed from their current trends. In the case of the rates Bearish. The Dollar Accumulation.

One can assess then, that the prevailing sentiment of a rate rise in December continues to dictate the market action. Until the December meeting, however, unless Janet does the bold thing and announce her intentions ahead of schedule, we simply do not know for sure what the FED policy will ultimately be.

While the Modern Family remains indecisive, until I see which way those disparities reconcile, except for a few chosen picks long and short, I find comfort in Yeats’ suggestion that I’m one of the best.

Regional Banks (KRE) linger at new 2015 highs. Russell 2000s (IWM), far from the highs, are at least holding a Recovery Phase. Retail (XRT) had traded inside Monday’s trading range, yet remains in a Bearish Phase.

Semiconductors (SMH) are still working off a reversal pattern from the highs made on October 23^rd. SMH closed back under the 200 DMA. Biotechnology (IBB) sits range bound trading between $320-340 and in a weak Recovery Phase.

Yeats’ poem is a riddle as he ends it with a question. In some interpretations, Yeats’ question inferred that things were getting worse while most people around him thought things were getting better.

Similarly is my intentional inference on the impact of the maybe interest rate hike. Will it happen? If so, is it too little too late? Will it be good overall or a ticket to an economic recession?

Yes, this is a case of a lack of conviction set forth by an irresolute Federal Reserve.

S&P 500 (SPY) Inside day. Apparently I’m not alone in a lack of conviction. 206.44 the 200 DMA to hold and 210 the resistance to clear

Russell 2000 (IWM) Closed right below the 100 DMA at 118.23. Also, 119 better to clear with today’s low key to hold

Dow (DIA) Another inside day. 175.735 the 200 DMA with 178.60 the point to clear

Nasdaq (QQQ) Runaway gap low is at 112.07 and ultimately the point to hold. Over 114.50 better

XLF (Financials) Inside day and closed over 24.50 so if that holds good sign

KRE (Regional Banks) Holding the old 2015 high 45.62

SMH (Semiconductors) 54.22 the 200 DMA pivotal

IYT (Transportation) Inside day here-not surprising. Looks like it could be consolidating but could go either way

IBB (Biotechnology) Range to break one way or another 320-340

XRT (Retail) Inside day with a break over 46.16 better

IYR (Real Estate) Held the 50 DMA and rallied to back over 100 DMA

ITB (US Home Construction) Has spent 6 weeks trading around converging moving averages-big move one way or another coming-26.50-28.00 range to break one way or another-big eyes here

GLD (Gold Trust) Unless this does the unusual and gaps and holds over 105, looks like all it did was work off oversold conditions and now can go lower

SLV (Silver) If gets back over 14 then I would regain interest

USO (US Oil Fund) Held 14.00 but not in an impressive way

OIH (Oil Services) 32.00 pivotal

XLE (Energy) 68.50 level a good risk point to hold. Back over 70.00 probably good

TAN (Guggenheim Solar Energy) Solars got smashed

UUP (Dollar Bull) The strength continues