The State of the Trend

By: George Krum | Sat, Jul 7, 2012
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Last week we concluded that overbought market internals will result in a pull-back. To put things in perspective, this is how overbought both the OEX and NDX were on the eve of July 4th:

That's right. All 100 components of both indices were on a short-term buy signal. When everybody suddenly gets so bullish, who's left to buy?

Friday's sell-off went a long way towards dampening bullish sentiment but did little damage to the technical picture. The SPX has been making higher highs and higher lows since June 4th, and that action bears some resemblance to the November 2011 rally, which gained almost the exact same amount of points (110) in the same number of days (21):

Therefore, for the bullish analogy to remain alive, the SPX shouldn't drop below 1317, and should ideally stay above 1337.

 


 

George Krum

Author: George Krum

George Krum
www.citdates.blogspot.com

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

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - 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).

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 - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

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OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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austrian-money-supply/