Yes, they could be negated.
The odd thing about those Class 1 sell signals is how everyone believes in them so much now that they imagine they see them occurring every time the market pulls back, even when there were no signals. A few people were praising the signals the other day, before the market soared again (oops). People don't bother to check whether there really were signals. They believe in them -- that's all. Heck, there are so many of them, with various classes, intraday, end of day, etc., so some of them have to be right. (The same might be said for all the interpretations of the CI's.)
I'm seeing a lot of sell signals, with all sorts of systems. But who's to say? Signals don't predict the future. No one believes that, because they have to believe that they're going to make money with all this mumbo-jumbo, this borrowed bag of statistical tricks called TA.
As for the CI's, they don't have to go to the maximum values before there are sell signals, of course. Since today's values are less than yesterday's values, that alone is a sell signal. And added to the fact that the market was up, the divergence raises questions about the rally, too. But it would be easier to see an obviously overbought market if the CI's maxed out. The market has been so volatile that the CI's could easily reverse direction tomorrow, and head back up. I'd say it's 50/50, as always.
But there's so much complacency right now that it's just mind-boggling, given all the uncertainty that remains. Proposed book title: "Speculation as an Oblivious Art."
And the things people are buying. MSFT, for example. From a technical standpoint, does price bumping up against a down-sloping 200 SMA raise any concerns? Nope. From a fundamental viewpoint, does a P/E of 58 seem reasonable? Sure!
Or how about DELL. Look at yesterday's candle. Look at volume the past three days. Price is at the upper Bollinger band. The P/E is 61.
People just want to believe that these tech stocks are going to keep on going up forever and ever. As for volatility indicators that measure complacency, they're seen as irrelevant. The market's going up, so it'll continue to go up, no matter how overvalued stocks are, and how much economic and political uncertainty there is now. (But that doesn't matter, of course.)
It's all too absurd. People see what they want to see. If the market tanks, they'll all be panicking again and envisioning worst-case scenarios again. All the phantom fears will surface again.
Testimonial: "Great work! Your signals were all completely correct today!!!!! You really can predict the future! I bought everything in sight. The bear market is over! There never was a recession! The market is obliviously going up -- oops, typo, I meant obviously going up. Please double-bill me again for your fabulous signals!!! By the way, did you say the market was going to go up or down tomorrow and Friday? I've read your note three times, and I'm still a little unclear on that. I trade confidently, by relying on other traders' predictions!" |
