From one over-cooked market to another. What you see here is the 5-day exponential moving average of the advance-decline line. It’s up over the red line that usually signals upcoming selling pressure and a place to wait to see either a pullback for long entries or a reason to pull profits from fortuitous trades on the long side that were initiated at the recent bottom.
Just yesterday the BP, the HILO and the TW were all telling us that the green light was on and it was all systems go, Houston. It’s at this point where we’re likely to get that ‘caught-you-leaning’ pullback that I mentioned in that very same post. It’s a complicated business, Elroy.
I have just returned from a trip to South Florida.
I see that all three of my indicators are in a column of Xs. What typically happens at this point, in the usual ‘caught-you-leaning’ manner, is a few days of pullback and then further upward movement. Of course the gloom-and-doomers will see any pullback as their opportunity to say, “see, it was a dead cat bounce.” They will be disappointed.
If the market was due, bound, likely, etc., to stop the selling, move up, start a new rally, etc., based on reliable statistical studies, and did so immediately after and/or in conjunction with the central planners’ attempted bailout efforts, did said central planners cause the rally or was it merely a coincident occurrence?
