It wouldn't be unusual to see some backing and filling soon, the market has come a long way in a very short time. That said, I'm still hesitant to step in front of this thing -- as I have been since April 15, when I called it a "freight train" -- so take that as a heads up more than anything. Until we see an impulsive decline, bulls could still have more tricks up their sleeves.
And that's pretty much how it went on Monday and Tuesday: some backing and filling, then bulls reached into their sleeves and pulled out more new highs. It will be interesting to see if we get more backing and filling or if the market breaks out and runs again, so in the meantime, let's take a look at some big picture charts, starting with this SPX chart from April 20. We did get the candle this chart discussed and while it's never impossible for something unusual to happen, it would be highly unusual for a market to "top" on this kind of candle. At the bare minimum, these types of candles have so much inertia that even when they are tops, they usually become drawn out tops with retests of the high and so forth:
Trend line-wise (not sure that's a phrase), SPX is above all the relevant trend lines:
It's also above the purple channel again, for the moment:
Finally, INDU remains the one X-factor chart for bulls and they would probably like to see this resolve in their favor:
In conclusion, additional backing and filling remains possible -- but the key thing bears are looking for (before getting hopeful) remains an impulsive decline. Trade safe.
No comments:
Post a Comment