Short Term Trading Member Forum

[techcharter]

Chuck,

I'm looking at a top forming.

From an E-wave view, RUT and TRANs have been in an ending diagonal since 2002/2003. INDU and SPX has been in a very choppy advance since 2009, either corrective or an ending diagonal. NDX made a motive wave in the DotCom crash, and looks to be making a double zigzag bear market rally, which is nearly complete.

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=spx&time=13&startdate=1%2F4%2F1999&enddate=1%2F4%2F2013&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=33&y=9

Other indicators support a topping process. The VIX is at historic lows, signalling no fear. The SPX broke the Sept 2012 high, but the relative strength index is weaker than in 2012. Volume has been flat over the last 6 months.

"Fundamentals" are: Increase of 401k withdrawal / cashout by those who are too young to retire. Regular retirees who will rely on their 401k for income (selling pressure). Whole life insurance cashout is increasing ( I have a friend in the business). 10% drop in car sales in Europe. Colleges loan default rate is still increasing and is now at historical highs. $1T Federal government borrowing over the last 4 years has not grown the economy proportionately, the multiplier is declining. Pushing on a string.

Social behaviors are trending toward negativity as indicated by dark and violent movies. Bikini's are being replaced by one-piece bathing suits. And the US is trending toward a military state, if not in the beginnings of wave 3.

The fundamental are giving a HUGE bearish divergence signal.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p08712175853