Max - Summation Index hitting new lows for 2007, this always leads the market.
It turned down in Dec. 2006 - yet we did not bottom till March.
We are near its lows again - yet markets are near there highs.
The turn will be fast and big in the coming few weeks.
Be positioned for it.
Can show other indicators as well. All paint a near term pullback in the markets, we are just stretched too far above the key MAs to attract new capital.
The Options Put/Call Index as well, failed breakout mid May and turned down a week ago.
Look at the MACD on the Utilities weekly - highest on record in years, no wonder they sold off this week. And that did not even dent the weekly MACD though it did turn it bearish!
For now, I just see a pullback, there is the potential for a healthy one - leading into again another rally later in the year. Potential for one greater top, then again maybe not. Getting very late in many cycles, risks grow going forward by the month into Jan/July 2008 - that I do trust. Again will let the data dictate. (made too many mistakes off the 2003 lows, but learned and grew tons - mistakes are what make a trader better in the long run, not the wins.)
Agree with your super computer program trade model, but LTCM sold their computer programs after their failure and many of these new programs are based off these. Program trades can go both ways and could actually cause more damage, LTCM already proved that!
But no matter what, forget what you think, I still trust my data, it is all that I have. You have to use more and more different charts and utilize every technical you can to gain an edge. Because in the end, technical trading still gives you an edge.
Always set your stops, long or short and stick to them, stay in the game is really all that matters.
West |
