Market is going up despite it is overbought. A good thing but right now, it is doing nothing but stalling out. I would consider to the people who are long to start Hedging or booking their profits in this rally. It may continue to go higher and you might miss the opportunity but it is better to be careful than sorry.
Updated notes on chart. The close of the month matters, but the wedge trend line is broken. If could move up to form a right shoulder and other indices are showing the same HS possibilities
10 years after the dot com bubble burst this one has barely retraced 50% of the bust. A sign of clear corrective rally. The risks to the downside are much higher than any strong rally to newer highs. Put this in context of the recent falls of AAPL, GOOG, NFLX and CMG. We got a rocky next couple of years.
With earnings season upon us,I will be watching individual stock option trading for "tells" regarding their direction. But overall breakdowns in major indexes will make the short setups have a higher probability of success,n than the long setups.
Though the S&P 500 and NASDAQ Monthly charts are showing early signs of a potential breakdown, the daily hasn't broken completely. We don't a confirmation from the charts on which way we are going near term, though the late day action makes me lean to a sell the news tomorrow - we will see.
For those who follow gaps, here are the major NASX gaps from Fall 2011 to...
