The market was up for the week and is very overbought. It would be nice to see the market pull back a little more before it resumes it’s march upwards. I am not reading too much into the price action on Friday. The weakness on Friday was needed and should not be read anything more than the market taking a breath.
The market is still historically expensive. When it does revert back to historical averages, it will be a bloody mess for many. To be honest, I am looking forward to shorting the market when it does turn. I don’t think we are at that moment yet an am not considering aggressively shorting the market where it currently stands. It could be a year or two before we get there. Could be three weeks. I have no idea.
Here is what I do know. Market breadth is either neutral or negative. The one I watch the most and is the early warning of an impending market shift is the 52 week NHNL. If the market continues to go higher, but the 52-week NHNL cannot get positive, this rally is over.
It appears money managers are pulling some money off the table. Not surprising with the current run.
The S&P has also slightly broken it’s hourly chart trend. Not much to read into that yet. I do like looking at the hourly chart. Not always, but there are times where it does a good job of showing when the market is acting in an orderly fashion like is has over the past few months. First it was very orderly down and now it has been very orderly up.
Will the orderliness continue????
