Breadth is diverging. This often happens at intermediate tops.
Emerging markets have failed to make new highs.
China, the driver of global growth appears to be in a bear market.
Oil has now broken the pattern of higher lows. The odds are high that the oil cycle has topped.
Throw in the fact that the current daily & intermediate cycles are stretching and the risks are very high on the long side at this point.
In other words, if you haven't parked yourself on the sidelines already, get outta dodge. FAST.
ReplyDeleteAny buy signals on the HUI Toby? Looks like its popped up out of a falling wedge pattern. Gold got support at 1320 land, and Alf Fields over on JSMineset was calling for a low here around the 25th. What do you think?
ReplyDeleteI'm going to go over a plan for PM in tonight's report.
ReplyDeleteThe S&P 500 and the broader market are due for a correction based on the technicals. The level reached today is almost identically similar to the level reached on April 23, 2010. On that date the market peaked and began a decline from 1,217 to 1,022 on July 2, 2010. All of the indicators, (RSI, Slow Stochastics, MACD, and Momentum), are showing similar levels. The indicators are as follows:
ReplyDeleteApril 23, 2010 January 26, 2011
RSI 70.81 70.55
Slow Stoch %K 0.89 %D 0.79 %K 0.87 %D 0.76
MACD 9.86 7.90
Momentum 102.95 101.98
The Ultimate Oscillator shows that there could be a few more days from this level indicated by the April 23 of 70.16 vs. 63.37 today. Volume has declined by almost about 900 million shares from 4.55Bil on April 23 to 3.65Bil today.
Just as on April 23, 2010, everyone was saying the market will continue to go up so you should buy now, so today, everyone is saying buy now. Within less than 24 hours, the markets began their long downward movement.
As on April 23, 2010, government debt levels continue to rise. Now, the Fed is pumping in more liquidity that will ultimately lead to inflation. The economy is showing positive signs, and that is bullish. However, markets do not go straight up, and we are long overdue for a correction.
I do believe we will finish the year higher, but we have gone to far to fast in January. Caution is in order.
The S&P 500 and the broader market are due for a correction based on the technicals. The level reached today is almost identically similar to the level reached on April 23, 2010. On that date the market peaked and began a decline from 1,217 to 1,022 on July 2, 2010. All of the indicators, (RSI, Slow Stochastics, MACD, and Momentum), are showing similar levels. The indicators are as follows:
ReplyDeleteApril 23, 2010 January 26, 2011
RSI 70.81 70.55
Slow Stoch %K 0.89 %D 0.79 %K 0.87 %D 0.76
MACD 9.86 7.90
Momentum 102.95 101.98
The Ultimate Oscillator shows that there could be a few more days from this level indicated by the April 23 of 70.16 vs. 63.37 today. Volume has declined by almost about 900 million shares from 4.55Bil on April 23 to 3.65Bil today.
Just as on April 23, 2010, everyone was saying the market will continue to go up so you should buy now, so today, everyone is saying buy now. Within less than 24 hours, the markets began their long downward movement.
As on April 23, 2010, government debt levels continue to rise. Now, the Fed is pumping in more liquidity that will ultimately lead to inflation. The economy is showing positive signs, and that is bullish. However, markets do not go straight up, and we are long overdue for a correction.
I do believe we will finish the year higher, but we have gone to far to fast in January. Caution is in order.