But that reminds me of an anecdote. A couple of years ago I read a well-known market analyst attribute a moving average directional reversal in the SPX to one of the blue chips going ballistic for a couple of days prior. That's when I realized that most people don't have a clue how a moving average works. They understand the "average" part. What they don't understand is the "moving" part. But I've covered all of that in posts past, and I won't bore you with it ever again.
So before we get to that event horizon, I'll mention my observation. If price starts taking off right here and now, then the makers are probably letting the frontrunners set up the market for a fall. Of course, the fall would begin at a higher rung of the envelope ladder illustrated below. This would set up prices to be dropped in contoured step with a higher envelope line without "registering" as weaking momentum on the 200ma. This keeps investors hopeful as price drops from a distribution high. And this is often a prelude to new lows. It's just the nasty way that things work.
Should we launch next week, I'll be watching very closely for signs of distribution.
