Hello Former Members & Guests,
Today I’d like to share with you the chart and the message I posted yesterday in SpikeTrade.com
A new high with warning lights flashing
Hello SpikeTraders,
It is important to understand that we are experiencing highly abnormal times in the stock market. This is not your usual uptrend, with rallies and pullbacks, everything moving more or less in gear. I am not alone to pointing this out. See Kerry’s latest SpikeSpeak (“A very rare condition…”). See Timothy V comment on that post (“I wanted to weigh in…). See Gianluca’s latest FGIC post in our blog (“FGIC remains…). One of our key goals in SpikeTrade is showing Members how to be a safer trader. Looking back at these weeks a few months from now you’ll probably say: “We were warned.” But let’s look at our charts…
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The market rallied today, with the Dow rising 83 points, the Nasdaq 4, and the S&P 11 points. The Impulse system ended the day blue on the weekly, green on the daily chart. And Bitcoin jumped on a rumor that Amazon might start accepting this wonderful instrument. An old Wall Street saying: “Buy on rumor, sell on news.”
The stock market rally continues to be driven by a handful of “generals” and a few loyal “officers,” while the “soldiers” are in a broad retreat. There are more New Lows than New Highs in the monthly and quarterly look-back windows, while the yearly window and the weekly chart are doing a pancake imitation – flat near zero.
I find especially troublesome the weakness of quarterly and yearly charts. The monthly is first to move, but the longer timeframes are closer to the backbone of the market – and they are bending lower.
Make sure that your long positions are protected with actual (not mental) stops. Plenty of short candidates around…
Best wishes,
………..That message was yesterday. Today the market is sharply down, with the New Lows ballooning in all lookback windows.
What’s next?
I highly recommend you join www.spiketrade.com and receive timely messages and a lot more daily.
Best wishes,
Dr Alexander Elder