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Tuesday, 12/13/2016 9:34:42 PM

Tuesday, December 13, 2016 9:34:42 PM

Post# of 200
12/13 Ultra-Short-Term Indicators: Readings were somewhat climactic. It appeared a price exhaustion was lining up, but today's positive readings are higher and didn't continue the trend lower. I believe today's readings could be the exhaustion climax. Climactic readings are either initiations or exhaustions. We've been in an almost unending rally higher, so high positive readings generally are exhaustions. The Bollinger Bands on the VIX have contracted. Readings at the upper or lower bands will now hold less significance.



Conclusion: It isn't surprising to see overbought indicators given the length and power of this rally. As I note in my webinars, overbought readings have less bearish significance in a bull market, especially one as strong as this. Trading on overbought readings in a bull market can be dangerous because they overbought conditions can easily persist. I would still expect to see a consolidation at a minimum and a test of the bottom of the daily chart rising trend channel around 224 or 225, nothing too significant based on bullish IT indicators

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