xD..why is that the high odds play?
Because from my experience, when you get this many consecutive narrow days on vapors after 250 SPX points rally in 7 months non-stop, that kind of long term trend line can easily break the spine of the index, at least initially.
I stress the word "at least" because whatever will happen over the long term, should happen after that initial reaction. So that sell off will be a good test of what will be coming next . That time, If I am wrong about my long term view , we will see SPX holding around 1380-1400 then rally back up to break out of this 4 year long trend line.
I strongly believe this is the thought process that has been tempting some OEX folks to load up OEX puts at this juncture. Because OEX has the same situation.
Even if we were not overbought now and even if we didn't have declining volume now, from my experience that that 4 year long trend line can easily produce a sharp sell off , at least for a short period of time, say a few weeks.
Edited by xD&Cox, 21 February 2007 - 06:50 PM.