Charlie McElligott gave a very good interview on MacroVoices last week and may be spot on for his call on Friday being the short term top in this recent rally (if this scenario continues to play out).
I was travelling on a visa run at the time and had to stop/start the interview a fair few times so I may have missed something in what he was saying but this is a quick summary of what I gathered from the interview,
Charlie believes (based on his CTA model) that there will likely be a fade of some sorts from here (in the range of about 5%) and all the people/money managers who have been waiting on the sidelines for a pull back will likely use this opportunity to jump back in, (that's if they do).
He seems to think this first pull back will be crucial for determining where most of the year plays out,
Whether the bulls have enough power to push on or whether bears regain control and push it lower..
He also mentions that the blackout period for 75% of the companies who are doing corporate buybacks ends around the first or second week of February so this should also help out the bulls if the bears aren't too strong.
Charlie mentions that the market has priced in no rate hikes until at least June and possibly even a rate cut in 2019..
He goes on to say that rate cuts by the Fed won't mean squat if global growth is slowing, it's all about when QT stops and/or when/if QE starts..
He concludes that the economy cycle will trump all else, eventually..
(and/or until massive central bank QE, not interest rate cuts)
My above bastardized version doesn't do the interview justice so it's definitely worth a proper listen.
Charlie also supplies a chart book with the interview, I think you need to sign up to MacroVoices for this. (It's free and a worthy resource).
The blue line is the 200MA which as you said is coming close to being touched.
I've drawn a 5% pull back resistance line (black) and the 2 scenarios based on what Charlie McElligott has said.
(20min delay)
