The State of the Trend

By: George Krum | Sun, Sep 18, 2011
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What a difference a week makes. Last week it was all gloom and doom, and I had to caution readers about being overly pessimistic given the overall technical picture and oversold market conditions.

This week the tables have turned. Market internals are as overbought as they come, and it's time to caution against excessive optimism.

Turning to the intraday chart, we find SPY firmly in the middle of the bear flag. The key levels to watch are clearly defined. A trip up to the top of the flag or a drop below 120 (1200 basis the SP-500), whichever comes first, should provide excellent shorting opportunities.

The channel chart supports this view as well:

Monitoring market sector rotation offers another useful way to spot early change in trend signs. The charts below are from my blog, and highlight the contrary nature of gold in this process:



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps available from iTunes:

OddsTrader - uses the power of Hurst Channels to produce price and time targets, and combines them with proper risk and position size management.

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world and to build long-term forecasts and models.

OT Pairs - is the first mobile app that gives users access to one of the most profitable and time tested hedge fund trading strategies.

OT Pivots - combines the power of Pivot lines with cycles and automatic signal generation.

Gann 9 - is the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

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Source: The Contrarian Take