2/15 Ultra-Short-Term Indicators: More climactic readings. In fact, they are higher than yesterday. I had thought we would see a similar price reaction as we did in December after its largest climactic reading, sideways price movement. I am still under the assumption that these readings are exhaustion climaxes, but we may have to wait another few days for the reaction. We're now looking at prolonged positive climactic readings like we saw in November and the end of June. Despite another strong rally, notice that VIX readings are getting higher which puts them closer to the lower Bollinger Band (remember my chart shows the VIX on an inverted scale). I think this is the sign there may be some problems under the surface.
Conclusion: Short-term indicators are overbought and ready to decompress. The easiest way for them to do this would be a decline. However, with the very bullish bias in the intermediate term, we could be looking at consolidation rather than a deep decline or correction over the next few weeks. For the pessimists out there, this does have the earmarks of a parabolic rise on the daily chart and those patterns usually end very badly and leave little time to get out safely. Yet with such positive IT indicators, I would expect a rebound to keep the longer-term rising trend intact.
