I see alot of signs in model that the bullish fun is nearly over here, best guess
- we churn around current level for few more sessions on comp/spx
- then turn back down for swing
What I can see in my data is another massive shift out of shorting and back to BTFD mode, was really extreme this afternoon on the Q's in particular.
This is NOT an exact timing tool, but, it is definitely trouble brewing.
Add to this, the Dollar strongly appears to me now to be completing 5 wave move ..very clear on EURO, and sterling as well.
Most of this bounce on Dow/Spx is due to Dollar drop - not institutional buying which is pretty non existent, and now retail piling back in and getting fairly euphoric relative
to price action, given comp is close to bear market lows and is possibly in a right shoulder of H&S pattern off Oct lows it just retested - i've rarely seen such a disconnect
of retail bullishness compared to reality from my viewpoint at least.
LQ is supportive still but I expect to also wane and roll over again, and this time, we have setup for a major drop in LQ..for first time since October 2022.
That's a troublesome nexus - but I also see BKX as very important signals here ...it is giving me big warnings and I favor it will turn down hard soon.
- we still have fuel for some more upside attempts on major indexes - maybe 2-5 more sessions attempting to move higher but
- I am looking for those attempt to fail, like today, as confirmation AND
- key data I look at continue to confirm this massive shift in shorting to BTFD extreme
- ideally dollar making a multi week low in this period 99-101 area as I went over elsewhere.
Now - I also said, I don't believe even if this plays out - that this bounce is done YET ...I only expect a pullback, of swing type ..then likely another attempt to move higher ..producing
another month or so of 'range' etc ... but this part is 'prediction' and must be adjusted to real time data.
Edited by EntropyModel, 17 January 2023 - 05:38 PM.