A Trader Journal

My current thinking is it will be some more time before we have a top i.e., Market (SP-500) might have either some more upside or go into side ways congestion. My reasoning as follows:

From bearish view, (see the chart for annotations) market has multiple confluences currently i.e.,

• Extended bull market and currently in 3rd leg.
• Decreasing momentum & volume in 3rd leg.
• Strong resistance and stall near resistance in 3rd leg.
• The 3rd leg is a 2 legged up move unlike prior legs i.e., leg-1 and leg-2.

So why then bullish/sideways view?

• Topping signs are too obvious. I find bit difficult to trust market when it is too obvious.
• Low volatility trend. Generally they are persistent and good at trapping most people.
• Low volatility trends end more often with side ways than V Shape corrections.
• Time symmetry - Current leg is only 23 weeks. Much smaller than prior 2 legs.

So what?
Given above, my current preference is to take both Long and Short positions provided they are at low risk position and play for smaller targets. Should sideways correction materialize, then both long and shorts has equal chance. Instead if bullish view materialize (i.e., market goes up next few weeks) then shorts might be stopped out for break even (hopefully) or with small losses and long positions would make up.