INDEX UPDATE
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Would like to take some time to make sense of things.
I have used the word weakness in the market while yesterday the market ran hard. I understand it causes confusion, since many would say how can it bbe weak and run so hard.
The market is not weak, the market is strong still, but technical signs are appearing indicating increasing weaknesses, which is implying that that this rally is slowing down. I had made mention of this slowing down process starting several weeks ago, and it has.
I guess that when one says slowing down, some are expecting a reversal immediately. That is not what I mean. For example, just look at the rate of incline of the last few weeks. Lets start with the peak 3/24 for the SPX, it closed at 1105 and yesterday's close was 1115. Yes there was a short lived pop which took us near 1130 and we may get back there again, but for the approx 3 weeks the bottom line is that we are only up 10 SPX points. This is not to say that we cannot continue up, but that the rate of incline in the SPX is definitely slowing down for the short/mid-term interim. All I am saying is that the market is not as strong as it was earlier in this run and that we are very close to the top which I predicted at 9100-9200(closer to 9100).
For the longer term the technical signs are still saying that this bull rally is still intact and that the market can go higher.
Recently the issue of money rotation has come up. Is this a sign of weakness or a sign of strength. It think it is both. In the early stages of money rotation it is a sign of strenght. As more sectors gets saturated it can then become a sign of weakness, or lets say a sign that we are topping out.
Hope this clears up any misunderstanding.
Seeya |
