This10 minute chart below of the ES shows several up ward drives that in the end are met by a distribution phase. I’ve included just today’s action, but it was just about the same on Monday. Because THEY have such tremendous leverage, the mad men at the helm can do this kind of stuff at will and for little or no reason, but to me it smells of DISTRIBUTION and if this is the case and if the Big Boys are selling, then why am I holding my longs? In a healthy market, the Big Boys will ‘buy’ the close, but for the last three sessions, Friday included, the Big Boys have sold the close. Gives me the heebie-jeebies, if you catch my drift?
Then there’s the $NYSI, which went backwards today. On Monday, the $NYSI added 24 ticks. Today it only added 20. Given that the $NYSI is lagging the market, this is bothersome to me. As I mentioned over the weekend, the $NYSI should be moving up at a fast and furious pace, but instead it is languishing. $NYSI should not languish for much longer or it will roll over of its own weight.
The daily chart below of the $SPX shows an index that is struggling. First we had the indecision doji this past Friday and then on Monday and today we see the $SPX unable to hold its highs while banging into the 200MA. If the $SPX does not break above the 200MA soon, then it may have to pull back in order to build up enough steam to get through that barrier. The red horizontal line on the chart marks the important 1277 area for the $SPX and if $SPX really wants to go higher from here, then 1277 must give way.
I’ve kept the symmetrical triangle pattern on the chart because we really haven’t launched out of it yet and there is the possibility that the $SPX will come back and test that falling trend line before moving higher.
Even with the $SPX up 14pts and 1.14% on the week, it could all come right back if we get anymore signs of distribution especially in light of the fact that $TRAN gave back almost exactly 50% of Monday’s move.
As my neighbor so rightfully stated, “You can never be too paranoid.”