It is a characteristic of signals that they are often misleading and also often quickly canceled. We think this is the case with Friday’s unusual day. We’re still trying to find out from “them” what happened Friday. We think it was radio waves from the mother spaceship — after all look at the Tunisians, the Eqyptians — the Steelers, the Packers… Be that as it may whatever signal was in it is not in it anymore. This is more or less the equivalent of an exhaustion gap. It looks like a signal one minute, but the instant it gets closed it’s a signal in the other direction.
Aggressive traders might add-on here. We’re going to watch for awhile.
I am going to be the contrarian. We are reaching extremely overbought levels here on a steep trend line. Might now actually be the time to lighten up and take profits on equity positions and not add new positions? Cheap abundant dollars are driving the equities markets to higher and higher levels; I would call it paper asset inflation.
Roger
I think SPX is in Wave 5 from the July low of 1012.
Wave 5 could attain 1362 which is 1.61 X Wave 1.
However, the SPX is walking in a minefield.