The market internals are flashing red as the SPX trades between 2870 and 2890. The increase in 52 week highs AND lows as the market is still above its 50 day moving average has triggered Hindenberg Omens the last several trading days. It is one of the few technical indicators that actually show a bearish bias. Add on top that my risk parity indicator, which is showing short term bearishness as bonds are weak along with stocks since the start of September. Lastly, I want to bring back the FANG+ index that I mentioned several weeks ago. I am firm believer that the SPX can't sustainably go higher unless the QQQ is leading the way. And right now, the FANG index is lagging.
It looks like this market is setting up for a nasty fall sometime within the next 4 weeks, as we are getting closer to the stock buyback blackout period, which just happened to coincide with weakness in early February, late March, and late June. So late September/early October seems like the perfect time for another pullback as the market internals bear their weight on this toppy market.
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2 comments:
Informative post.. Thanks for sharing.
CCO for Hire
The nasty came on Oct 10 -- which was exactly within your "4-weeks" prediction time-frame. Brilliant!
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