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2/1 Ultra-Short-Term Indicators: No climactic readings, though it is interesting to note that the VIX, though closing on its average, popped above the upper Bollinger Band which is very short-term bullish.
Conclusion: Indicators in all timeframes are bearish. There is a clear bearish rising wedge on the SPY that certainly calls for a decline, but as we've seen over and over this past year, a rally doesn't have to build off a correction. Price has found a way to hold ground by consolidating mostly sideways rather than correcting. In any case, I would still expect to see price test the December low at around $222.
1/31 Ultra-Short-Term Indicators: The VIX is hovering near the bottom Bollinger Band which does suggest a bounce or pop to the upside. I wouldn't count on it to push much higher past the gap, more likely just enough to move the VIX back toward the upper band.
Conclusion: The market is treading carefully in anticipation of the Fed rate decision; although, the expectation is "no change". Investors have been cagey about President Trump's executive orders which may or may not be as business friendly as originally thought. Bottom line is that the market needs a decline or correction. It seems the modus operandi since the beginning of last year is a rally followed by mostly sideways movement, and then followed by more rally. Based on VIX and double-bottom on 10-minute bar chart, I would expect some upside this week, but ultimately a finish at the bottom of the original consolidation channel around $225.
1/30 Ultra-Short-Term Indicators: I was expecting to see more climactic readings today but readings were elevated, but not quite climactic. The VIX is sitting on its average, but it did make a move to the bottom Bollinger Band. It didn't penetrate it, so I believe we could still see more downside.
Conclusion: Indicators in all timeframes are suggesting more decline after the island reversal executed. There is a little bit of optimism that can be associated with the bulls ability to pull prices out of the basement today to close above support at previous all-time highs. However, overall I would expect more decline to test the bottom of the past months' trading channel around $225 at a minimum.
1/27 Ultra-Short-Term Indicators:
Conclusion: The market may be taking a pause before rising higher, but indicators in all timeframes are not looking very bullish right now. The good news is that it appears the market is fine with moving sideways until the next rally. I suspect there is more consolidation ahead.
1/26 Ultra-Short-Term Indicators: No climactic readings today, but I do believe the initiation to higher prices is not done just yet. There could be concern in the VIX topping, but the channel is very thin and sideways price action has managed to easily unwind the VIX.
Conclusion: The market took a pause today. Short-term indicators remain very bullish, so I would expect higher prices. Intermediate-term indicators still hold some bearishness, but at this point, overbought indicator readings have been alleviated with sideways price action so a major correction isn't likely right now given the strong bull market wind.
1/25 Ultra-Short-Term Indicators: Yesterday's initiation impulse readings were built upon today with even higher climactic readings. This calls for at least another few days of upside. The VIX could be a problem as it is starting to push against the upper Bollinger Band. I think the climactic CVI and Participation Index override the VIX which could expand its bands if we see some more strong rally days.
Conclusion: Short-term indicators suggest more upside and intermediate-term indicators are attempting to pull out of a long decline. Until intermediate-term indicators look more bullish, I would look for some more short-term rally, likely followed by a pullback if IT indicators remain bearishly configured.
1/24 Ultra-Short-Term Indicators: We finally got some climactic readings on the CVI and Participation Index - UP. When these spikes arrive, we must then determine if it is an exhaustion climax or an initiation impulse. Since the previous short-term trend was declining, I believe these readings are initiations, the initiation of a new rally. Remember these indicators are extremely short-term in nature (hours to days timeframe), so a "rally" meaning higher prices for a few days. It may require a day or two of shake out, but in any case, I believe these indicators are hinting at more upside this week. The VIX rose but hasn't reached the upper Bollinger Band just yet.
Conclusion: A somewhat surprising breakout occurred today, likely on what investors consider "business friendly" executive orders. Technically it was surprising as indicators have been neutral to bearish for some time. Ultra-short-term indicators suggest there will be some follow-on to this rally, but intermediate-term indicators are still looking bearish so I'm not expecting an extended upside move.
1/20 Short-Term Indicators: These indicators are in neutral. They're congregating around the zero line looking mostly directionless. There seems to be a slight bearish bias as they are trending lower from previous peaks. But overall, I read them as neutral.
Conclusion: Short-Term indicators as a whole are neutral or no information to gain. However, intermediate-term indicators remain very bearish. If you take this at face value...we should see more neutral or sideways action in the short term, but eventually we should see a corrective move based on the bearish IT indicators
1/19 Ultra-Short-Term Indicators: We saw somewhat climactic negative readings on the Participation Index - DOWN and CVI. Normally I would see this as an initiation to lower prices. I still think that is possible, but the VIX is beginning to flirt with the bottom Bollinger Band and that generally means a few days of positive price movement. Given options expiration tomorrow, we will likely see more shake out but next week these indicators suggest a few days of upside price movement.
Conclusion: There is a new declining trend channel forming within the current trading channel. There is room for price to move somewhat higher and remain in the declining trend channel, but ultimately given bearish intermediate-term indicators and soft short-term indicators
1/18 Ultra-Short-Term Indicators: No particularly climactic readings. The VIX is making its way to the bottom Bollinger Band which usually means a bounce
Conclusion: Short-term indicators suggest a bounce or more sideways movement. Intermediate-term indicators imply a decline or more sideways movement. There is speculation about how the upcoming inauguration might affect the markets on Friday, but looking at the sum total of the indicators, we are likely to see more sideways movement overall.
1/17 Ultra-Short-Term Indicators: Unfortunately there isn't anything to glean from ultra-short-term indicators. Of interest might be the VIX dropping below its average a bit.
Conclusion: Not much new to see in the market or indicators. The mixed message between short-term indicators and the PMO does suggest more sideways movement.
1/15 CONCLUSION: The nice thing about writing weekend articles is that the article can stand for a day or more before the market makes it irrelevant. In my prior week's commentary I concluded that internals were such that they could accommodate a continued rally signaled by the price breakout. Great conclusion, except there was no followthrough on the breakout, and internals turned negative. Now my primary concern is that price will break down in response to weakening internals. Of course, the market could turn on a dime and move higher, but, until then, I am cautious
1/13 Ultra-Short-Term Indicators: We're still not getting any useful readings from the ultra-short-term indicators. The VIX is above its average but isn't making a move to bust the upper Bollinger Band.
Conclusion: Nothing much to write about for the week. The market continues to travel within a defined trading channel. Volume is petering out which suggests to me a lack of energy and slow end to the bullish forces that have kept price steady.
1/12 Ultra-Short-Term Indicators: No information to gather from today's ultra-short-term indicator readings.
Conclusion: Price action and indicators suggest at least a test of the bottom of the current trading channel around 224. Intermediate-term indicators are very bearish so I wouldn't expect that support to hold.
1/11 Ultra-Short-Term Indicators: No climactic indicator readings and the VIX is rather stationary above its moving
average.
Conclusion: Bearish indicators suggest downside, but as we saw through the summer, a consolidation pattern could also cause these indicators to move further south; a decline is not necessary. However with so many bearish indications out there, it is hard to imagine that a decline or corrective move is not next.
1/10 Ultra-Short-Term Indicators: No information from these indicators today. The CVI has a reading of zero. The VIX is above its moving average within the bands and moving sideways which gives it a slight bullish bias, but nothing to hang a hat on.
Conclusion: Price is trading back within the sideways trading channel. Short- and intermediate-term indicators are in agreement that a decline is up next.
1/9 Ultra-Short-Term Indicators: We got negative readings on the CVI and Participation Index - DOWN, but neither reading is climactic or really elevated. As expected the VIX has turned down on today's decline after closing in on the upper Bollinger Band.
Conclusion: The market tapped into all-time highs last Friday, but today returned back within a trading channel. Indicators and a downward facing PMO tell us to look for more downside.
1/6 Ultra-Short-Term Indicators: No climactic readings. The VIX is testing the top of the upper Bollinger Band and that generally means we will see a decline or at least consolidation.
1/5 Ultra-Short-Term Indicators: Yesterday's climactic readings seem to be confirming a buying exhaustion as price today was unable to close higher. Readings today are elevated and could be looked at as the follow-on to yesterday's buying climax. The VIX isn't quite to the top of the bands, but it is close enough to support a decline or downturn.
Conclusion: Short-term indicators don't seem in line with the market environment right now. They are bullish and suggest we'll see a breakout before a decline or correction. It could happen, but with intermediate-term indicators so bearish, it doesn't seem likely that it will really amount to much of a gain.
1/4 Ultra-Short-Term Indicators: Speaking of buying exhaustion, we had very climactic positive readings today. It could be read as an an initiation, but we had two very positive rally days and stop at overhead resistance. I think we are looking at a buying exhaustion. Notice that the VIX is on its way to the upper Bollinger Band which usually is a sign that the market will top in the very short term.
Conclusion: After two very strong rally days that brought price near all-time highs, the PMO and short-term indicators have turned up. Given the climactic readings on the ultra-short-term indicators, I doubt the rally will continue much longer. Of course if we get a strong breakout, we'll have to reevaluate.
1/3/17 Ultra-Short-Term Indicators: Readings were elevated, but not climactic. We're coming off very climactic negative readings. I'm still under the assumption that those readings will play out as an initiation to lower prices. The VIX called for this price rise and it is no longer on the bottom band.
Conclusion: The intermediate-term indicators are quite negative right now and suggest a corrective move ahead. Short-term indicators are indecisive, but trending lower. While we could see some short-covering that would move the market higher, I don't think it will last given the bearishness of the indicators.
1/1/17 SP 500 PRICE VS EARNINGS
CONCLUSION: The market exceeded the normal overvalued level (red line) a year ago and widened the gap until 2016 Q3 earnings made a clear turn upward. That is a positive development, because, at least, earnings and price are moving in the same direction; however, we still need to be concerned that extreme overvalue conditions weaken the fundamental foundation of the market.
12/30 Ultra-Short-Term Indicators: Today's readings are absolutely climactic. I took a look at when we have had similar or higher readings. They do typically come at price bottoms. The VIX suggests a near-term bottom as well. However, if you look at the cluster of negative climactic readings from early 2016, I think it is more representative of what is happening here. I believe today's climactic readings are still a part of an initiation to lower prices. We could see a cluster of negative readings. If they begin to decline, that's when I would look for a price bottom.
Conclusion: The only bit of bullish activity for the SPY occurred with the VIX and possibly the CVI and Participation Index (if their climactic readings are exhaustions). These are very short-term indicators, so we could see a price reversal in the next few days but it wouldn't necessarily have to turn into a longer rally, only a small bounce. The rest of the indicators are very bearish, so I would expect lower prices over the next one to two weeks
12/29 Ultra-Short-Term Indicators: Readings were somewhat elevated. Yesterday's climactic readings did turn out to be characteristic of an initiation to lower prices. With readings still elevated, I would expect a continuation
Conclusion: Short-term indicators are leaning bearish, but still could rebound from previous lows at the zero line. The intermediate-term indicators do look bearish and as the longer timeframe has an effect on shorter timeframes, these IT indicators tell me that those short-term indicators will probably resolve negatively. This suggests a bearish January
12/28 Ultra-Short-Term Indicators: I think you could make a case for today's climactic readings being either an exhaustion or an initiation. However, given the large black engulfing candle today, I would have to lean toward an initiation to lower prices. The VIX is declining, but hasn't quite reached the bottom Bollinger Band so I don't think that can be considered bullish just yet.
Conclusion: While this decline pushed PMOs into SELL signals, support is holding. I am expecting to see a decline pick up speed in January after the holidays, but today's rather steep decline could be the spark that ignites a continuation of today's drop. Short-term indicators are neutral, but intermediate-term indicators are concerning as they top in overbought territory.
12/27 Ultra-Short-Term Indicators: The readings were somewhat elevated, but overall they are reading neutral. The VIX is also in the neutral zone. Note that the penetration of the upper Bollinger Band only resulted in a pause, not a decline.
Intermediate-Term Indicators: The ITBM and ITVM ticked back up which is good news, but the negative crossover and topping PMO suggest this could be an intermediate-term price top.
Conclusion: The short term is neutral to bullish, yet the intermediate term has a bearish bias. As I noted in the introduction, this suggests to me that we will see more consolidation in the short term likely followed by a breakdown or decline from the congestion area.
12/26/16 SMALL CAP ITBM
Introduction
The Intermediate-Term Breadth Momentum Oscillator (ITBM) was developed to add a new perspective to interpretation of the McClellan Oscillator. The Ratio-Adjusted version of the McClellan Oscillator is used for calculating this indicator.
Calculation
To calculate the ITBM, add the daily McClellan Oscillator (Ratio-Adjusted) to the daily 10% exponential average (Ratio-Adjusted), then calculate a 20 day EMA of the result.
Interpretation
The ITBM is a barometer of breadth.
The absolute value indicates how overbought/oversold the market is.
Direction is most important because it indicates whether the market is getting stronger (rising) or weaker (falling).
The best condition is for the ITBM to be rising above its 10-EMA, and the worst is falling below its 10-EMA.
It is extremely negative if the ITBM tops below its 10-EMA and below the zero line
Conclusion
The ITBM is an intermediate-term indicator that gives a different perspective of breadth than the shorter-term McClellan Oscillator. It can be used as a notification when negative McClellan Oscillator readings should be taken seriously.
http://stockcharts.com/school/doku.php?st=itbm&id=chart_school:technical_indicators:dpitbm
12/26 Intermediate-Term Breadth Momentum Oscillator (ITBM)
http://stockcharts.com/school/doku.php?st=itbm&id=chart_school:technical_indicators:dpitbm
12/26 In the last few weeks the market has moved into a bullish pennant formation. In doing so it also violated the rising trend line on Thursday, but the trend line penetration has sideways, rather than sharply down, so I think the pennant carries more weight. Nevertheless, medium-term indicators are sufficiently overbought to cause me to start looking for a pause or a pullback.
On the following chart there are medium-term indicators for price (PMO), breadth (ITBM), and volume (ITVM). While not at extremes, they have all topped at the overbought side of their normal ranges. This is not a situation that can't be quickly reversed by more positive price action next week, but for now the market's potential for upside is degraded by these internals.
One thing we should remember is that we are in a bull market, and in that context overbought indicator tops are not normally prophets of doom. Yes, there will eventually be a final bull market top, but by my calculations the current cyclical bull market is less than a year old (February), and it should continue for at least another year or more.
CONCLUSION: This is probably not an ideal time to open new long positions. Our medium-term indicators have topped in overbought territory, so we should be expecting some kind of consolidation or correction; however, the recent pennant formation shows the short-term potential for another leg up before corrective action begins.
http://stockcharts.com/articles/decisionpoint/2016/12/on-alert-for-a-top.html
12/23 Ultra-Short-Term Indicators: Nothing helpful here. No climactic readings. The VIX has turned down which makes sense given the pause in the rally.
Conclusion: Indicators are starting to show deterioration in the short and intermediate terms. It could be the result of the current consolidation/pause, but I don't like that IT indicators are breaking the rising trend they have been in most of the month. This is a deeper pullback than we saw during the last rally pause. Stay alert.
12/22 Ultra-Short-Term Indicators: No climactic readings. The VIX has started to decline a bit since popping above the upper Bollinger Band yesterday. This also is bearish for the short term.
Conclusion: Indicators are starting to get bearish, particularly the intermediate-term indicators. I think we will be fine tomorrow and probably through the new year. I would think that profit-taking would be stronger after the 1st for tax purposes. Before the end of the year we could see sellers divesting from losing positions for tax reasons as well, but I think the market will be most vulnerable in January. There is a long-time technical indicator known as the "January Barometer". It says that the close for January sets the tone for the year. If January prices are down, the rest of the year is supposed to end in the red as well.
12/20 Ultra-Short-Term Indicators: No climactic readings, but the VIX nearly hit the upper Bollinger Band. It is close enough to the upper bound to be concerned about a very short-term pullback.
Conclusion: The market is basically consolidating, but today saw a small breakout from the pennant of inside bars which is bullish. Short-Term indicators are mostly neutral right now with the VIX being the only bone of contention as far as bearish activity. Intermediate-Term indicators are staying the course in their rising trend so I don't see a correction brewing yet.
12/19 Ultra-Short-Term Indicators: There are no climactic readings today. The VIX is flirting with the upper Bollinger Band again which could be an attention flag to a possible price top.
Conclusion: Short-term indicators are neutral right now. Intermediate-term indicators are not yet portending doom, but they are beginning to look less and less bullish each day. Price action is moving sideways but also narrowing indicating equilibrium or balance, but mostly indecision. Neither the bulls nor the bears are showing any conviction. Talking heads are saying that inertia will keep prices moving up as it is the path of least resistance. The PMO is decelerating suggesting that momentum isn't there and it will take more than inertia to move prices higher.
12/18
CONCLUSION: Even in the strongest bull market there will be some stocks and sectors that are not following the broad market. Currently, three of the ten S&P 500 sectors are in technical bear markets, and they have remarkably similar charts. Consumer Staples (XLP) and Health Care (XLV) appear to have a good chance of reversing their declines and joining the bull market. Real Estate (XLRE) has been part of the post-election rally, but its performance has been relatively poor, and it seems least likely to escape the bear.
http://stockcharts.com/articles/decisionpoint/2016/12/bears-inside-the-bull.html
12/14 Ultra-Short-Term Indicators: The buying exhaustion suggested by the CVI and Participation Index - UP finally happened. Today's readings aren't really climactic but they are continuing the decline in readings which suggests to me that the decline isn't complete.
Conclusion: Short term is bearish, but with IT indicators still looking bullish and recognizing the strength of the current bull market, I would expect to see this decline to find support, either at the bottom of the rising trend channel or at horizontal support around 218.
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
12/9 Ultra-Short-Term Indicators: The VIX continues to flirt with the upper Bollinger Band. As noted before, these conditions can persist, but we do know that short-term declines tend to follow the VIX. Readings are climactic on both the CVI and Participation Index - UP, but they are declining and suggest a possible exhaustion of the current move.
Conclusion: The shorter-term indicators and falling volume are signaling a possible decline. Given the strength of the market and bullish intermediate-term indicators, my sense is that we will see a test of the bottom of the rising trend channel or even a break below it to form a less steep rising bottoms trendline. Until intermediate-term indicators reach the top of their range, I would expect this rising trend to continue.
12/8
Ultra-Short-Term Indicators: Though not as climactic as yesterday, readings today are considered climactic. I believe this is an extension of the initiation impulse, but we do have to be aware of the possibility of an exhaustion climax. I could make a case for either one. The VIX turning down from its recent penetration of the upper Bollinger Band does suggest a pullback. However, we can see from previous positive climactic readings, they can go on for a few days before they are considered exhaustions.
Conclusion: Short-term indicators are beginning to reach the top of their typical range and climactic readings along with the ultra-short-term VIX suggest a possible pause or pullback. The rising trend channel on the SPY is looking good as are intermediate-term indicators.
12/7/16
Ultra-Short-Term Indicators: Now these are what I would call climactic readings. They are coming on the cusp of a new upward trend started at the pullback low. I would read these as bullish initiation readings. They are coming off of declining and then negative readings. This could likely be a repeat of what we saw at the beginning of July. A small pullback (7/1 - 7/3) followed by a breakout move accompanied by similar climactic readings. If you want something to worry about, the VIX has now penetrated its upper Bollinger Band which is typically a sign of a price top. As I pointed out in today's webinar, it isn't unusual to see the VIX stay steady in overbought territory
Conclusion: Today's fireworks were impressive. Indicators suggest that the rally isn't likely over. We could see another pause, but if the indicators are correct, more records are likely to be broken
12/6/16
Ultra-Short-Term Indicators: There were elevated readings on the CVI and Participation Index - UP, but not what I'd call climactic. We've had two up days and high positive readings confirm the trend over the next few days. The VIX is nearing the upper Bollinger Band and that typically is a place for a decline to begin. It implies confidence in the current uptrend. Sentiment being contrarian suggests a short-term decline after a break above or test near the upper band.
Conclusion: The throwback toward broken resistance occurred and appears over for now. Indicators in all timeframes are bullish with the exception of the VIX which does suggest another market top. The angle of ascent of the rising bottoms trendline will be difficult to maintain but a continued advance does seem plausible given bullish indications.
12/5/16
Ultra-Short-Term Indicators: I don't like the negative divergence on these indicators. Overall, they are neutral due to no climactic readings. The VIX is back to lows, but could move lower. If it moves lower and competes with previous low readings, the market is vulnerable to a decline.
Conclusion: Ultra-short-term indicators haven't yielded climactic readings, but readings are diverging negatively from price.
However, short- and intermediate-term indicators are bullish.
It appears price has found support at previous all-time highs around 218 for the SPY. I'm not overly concerned about a breakdown below 218 as other levels of support are available and as noted, short- and intermediate-term indicators are bullish.
12/4/16 Carl Swenlin | December 04, 2016 at 12:20 PM
CONCLUSION: I am concerned that there are suddenly too many bulls, but experience shows that extreme sentiment readings can appear well ahead of a price top. While some of the bullishness can be justified because of the prospect of a new business-friendly administration in the White House, some technical indicators are not confirming recent record price highs. Our immediate concern should be that SPY does not fall below the support line at 218.40. Should that support fail, bigger problems could emerge.
No one knows for sure, but we are in a bull market, so we should assume outcomes will be bullish until proven otherwise. About two weeks ago the market blew through a line of resistance drawn across the previous all-time highs in August. Last week a new, all-time high was made, then the market met technical expectations -- it pulled back toward the point of breakout. So far, so good, but there are some problems.
First, the PMO topped. It is a shallow top that can easily be reversed by positive price action this week, but for now it is a negative.
Second, longer-term indicators are showing rather sharp negative divergences, and their readings are substantially lower than we might expect with the market making new, all-time price highs. For example, the Percent Buy Index (PBI) shows that only 63% of S&P 500 stocks are on Price Momentum Model (PMM) BUY signals. The other two indicators show a similar lack of participation. The flip side is that there is still plenty of room for the indicators to move higher.
12/2/16
Ultra-Short-Term Indicators: Nothing to report on the ultra-short-term indicators. No climactic movement. The VIX is topping, but not convincingly which I think leaves the door open for a continuation of the decline
Conclusion: Short-term indicators and the PMO are reacting to this throwback toward previous all-time highs as expected with readings in decline. Intermediate-term indicators are technically moving lower, but not significantly. A pullback would prime the pump to bring sideline money of those who missed this rally but don't want to miss the next one. We'll watch intermediate-term indicators closely to determine if a continuation of the decline will deteriorate the bullishness on the weekly price and intermediate-term indicator charts
12/1/16
Ultra-Short-Term Indicators: There are not any climactic readings here, with the possible exception of the Participation-DOWN index.
Conclusion: As a short-term reaction to the election results, the Trump Rally certainly makes sense to me; however, the S&P 500 Index P/E is currently 25, so it also makes sense that maybe a period of correction would be a healthy undertaking. Technically speaking, a correction has started. I can't say if it will last another day, but the indicators can accommodate a lot more price decline.
11/30/16
Ultra-Short-Term Indicators: We're now seeing negative readings on the CVI and Participation Index (larger than positive readings). They are not at all climactic, but I do think they speak to very short-term weakness. The VIX topped and that generally occurs at price tops.
Conclusion: Short-term indicators have been suggesting a weak rally and possible reversal almost since this short-term rally began which is of course, very frustrating. It does appear however that weakness is being revealed with price closing below the 5-EMA. Given the very positive configuration of the monthly chart and intermediate-term indicators, I am looking for price to find support quickly, likely at previous all-time highs.
11/29/16
Ultra-Short-Term Indicators: No climactic readings today. Note that the VIX is now beginning to top which generally suggests a short-term decline.
Conclusion: The SPY may finally be pulling back toward previous all-time highs. Short-term indicators remain bearish. The VIX suggests a small decline in the immediate future. After that, as long as intermediate-term indicators stay in a rising trend, I'd expect prices to head back up as sideline money enters in earnest to catch the next move up.
11/28/16
Ultra-Short-Term Indicators: No climactic readings, but I do note that we have a negative reading on the CVI for the first time in weeks. Additionally, the VIX has topped and also suggests a decline.
Conclusion: It appears as if the market is finally ready to pull back to support at previous all-time highs for the SPY. Given price's rise above all-time highs and the flurry of positive news items, I am concerned this short-term decline could turn into a bull trap, with prices refusing to retrace back to last week's top. Intermediate-term indicators favor a retracement and continuation of this bullish move after a pull back to at least 218, possible 211 or 215 where declining tops and horizontal trendline support still lie.
11/25/16
Ultra-Short-Term Indicators: We are still seeing elevated readings on both the CVI and Participation Index - UP. This continues to suggest a buying exhaustion is in the works, but we've been anticipating this exhaustion for quite some time now. I believe it is still valid. The VIX seems to have plateaued which also could suggest a buying exhaustion.
Conclusion: It is unusual to see a sustained rally with no real pullbacks. I'm still looking for a return toward previous all-time highs around 218.50 before the next upside move based on intermediate-term bullishness and short-term bearishness
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