The State of the Trend

By: George Krum | Sat, Jul 7, 2012
Print Email

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

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).

Copyright © 2011-2014 George Krum

All Images, XHTML Renderings, and Source Code Copyright ©



Source: The Contrarian Take