Weekly momentum cycle of S&P appears to have turned
McClellan Oscillators have been stuck around neutral
There has been a plethora of opinions pointing out highly positive sentiment levels.
There has been no shortage of top calling.
While sentiment has been at statistically high levels of bullishness for weeks and S&P may have arguably looked toppy, it has held a tight advance and made new highs for the uptrend.
This situation may be frustrating to shorts and out-of-position bulls.
At Market Time premium, I have been following the uptrend that started late summer. I have pointed out divergences in momentum and breadth, I have also pointed out the inability of bears to do something bearish when they had chances to do early and mid December
I have emphasized the importance of price as the first and the last judge of all matters in the market.
To follow the trend (and the price), I have set, revised, and re-set price levels and conditions that might indicate a change in trend. I have identified levels of support in multiple time frames. I have also defined levels that might force me to sell all or part of my S&P position. As index rose, I revised and lifted my levels.
That has allowed me to stay in the game on the long side of the market despite constant calls of tops based on high sentiment, or divergences, or what-not.
Index will finally correct at some point. I am not sure when, but I can define, revise, and update my exit strategy so that I keep most of my profits when that turn finally comes.
Benard Baruch said
"Don't try to buy at the bottom or sell at the top. It can only be done by liars"
he also said
“You can have the first 20%, and I’ll let you have that last 20%; I’ll settle for the 60% in the middle.”
That's what I try to do: find a trend, run it, and book the most of it.
For detailed analysis, my levels of exit/concern, and annotated charts, subscribe to premium posts at
S&P 500 – May 15, 2012 - Bottom Line: Long term trend is up. Mid-term trend is down. Short-term trend is down Weekly S&P stage is Late Advance (2-C) Daily S&P stage is Strong Decli...
1 year ago