3 replies to this topic

[arbman]

Breadth is 2:1, it could potentially hold on to the gains with perhaps some intraday volatility --which may already happened for the day, but the leadership is now deteriorating, so the next high will be an excellent short once this is exhausted ahead of the major 16 wk cycle low.

NDX, RUT are lagging this morning in the market cap weighted indices (beside sector indices) as both tech and financials are not outperforming. I guess the 16 wk cycle high will be in by early next week. It would be a big negative obviously if the Apple earnings would be sold tomorrow --for now I doubt it will be, but I tend to think we will see the peak with Microsoft as usual with the mega-cap among the tech earnings. XOM will probably produce a lower high at the end of the month.

I would like to sell short a chronic high reached only by the energy issues from here with the lagging breadth, if it happens that way within 2 weeks of the 16 wk cycle low. It will have the highest odds of success, otherwise this is still an uptrend and early short entries can still be stressful, especially ahead of the two mega-cap tech earnings this week...

AAPL, XOM and MSFT still have the largest market caps and their earnings are ahead. Does anyone think Apple will disappoint after Google? Technically the market is ready to decline, but we are in the most difficult period to trade ahead of a trend change, imho...

Best of luck.

[relax]

do trends change during earnings season you know the line " a crisis is something you don't see coming" ;-) so a trend change is also something which one wouldn't see coming if looking at conventional numbers, that is earnings if the trend/liquidity is strong enough a bad apple report won't matter more than half a day that high in nyhl should get tested, so as you indicate one more high should be coming, regardless of anything from goldman or apple

[arbman]

I agree, the bounces or rallies from here are short entries, but I think the patience will pay off better than entering the short positions right here...

[arbman]

NQ made a new high tonight, while ES didn't yet, technically this puts the tech sector back to the top of the leadership. If the financials recover some and today's strong breadth into close spills over tomorrow in the opening hour, we should see new highs and beyond on SPX. The best the bears can expect at this stage is a gap and crap in the morning, but the market is complacent, this will be a slow collapse of the bull under its own weight. It seems like Microsoft will mark the next blow off top with a divergent breadth, possible. I tend to think tomorrow we will see more speculative activity in the call options flying all over the place than actual breadth and volume supporting a move up. In any case, the best gains of this parabolic advance may be yet to come, I would still refrain from selling short until the mega-cap earnings are out...