Thursday March 13 2014
Peaks in the RSI and the NASD Advance Decline have led to short term pullbacks, look at January for example. We registered a similar peak this past week. While markets appear on track for another high by May, the Action on Friday's close suggests some short term profit taking.
TMP This past weekend
S & P
Everyone who has tried calling a top in this market has failed. But, here is the monthly chart up against the upper Bollinger Band. Compare the chart to 2005-20078. We see the same pattern, hugging the upper band in a wild exuberant bull move. If this turns out to be the top or the start of a double top, looking at the chart six months from now, would you be surprised?
Daily SPX, Same Indicators
Suspicions confirmed! This looks like the correction which began in late January. The arrows say it all.
And money scurries into Bonds
I repeated Sue Herra's comment that she was puzzled bond rates were still so low. Perhaps this answers the question, the bond market was still on guard against a stock pullback.
Whether this is just another January pullback or something larger remains to be seen. But as I said, if this turns out to be the top, would anyone looking at these charts be surprised?
Decision Point has now been folded into stockcharts.com. It will take a while to learn all the new toosl available. It is noteworthy that using the Rydex indicators, the stockcharts group today commented we are the most overbought since 2007.
More to follow this weekend.
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