As you know I primarily use cycles in my analysis. That doesn't mean I ignore other disciplines, just it is not my primary focus. So let's look at some other indicators.
I. There is a large inverted H&S pattern. The pattern has fulfilled its upside projection for the right shoulder and should no longer offer upside support.
II. There is a time based Fibonacci (see previous post which referenced David Knox Barker) that is now complete. It is 21 months since Mar 9, 2009 low and 21 is a Fibonacci number (Fibonacci series 1, 1, 2, 3, 5, 8, 13, 21, 34, etc).
III. There is a price based Fibonacci (.618 retrace of top to bottom on Mar. 9) at 1246 that was fulfilled today.
IV. CPC and CPCE (call/put ratios) are at extreme bearish levels. See chart 1.2: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3729231
V. Sentiment levels have become extremely biased to the bullish side (contrarian indicator). "Dumb" money measurement at very high levels (bearish). The VIX (yes it is a sentiment indicator) is near April lows.
VI. Very extreme reading on the ARMS (TRIN) indicator over the past 10 days. See chart 1.2: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3729231
You get the idea. Combine this with cycle analysis indicating an imminent turn and you have to believe the long side has become extremely risky (see weekend post).
GL traders.
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