Naturally I could be wrong. But the weight of evidence from sentiment to chart analysis tells me we have moved off the top for this recent up move which started in mid April. Two factors will help to confirm it for me. One is for SP500 to break under 1190 and stay there. The other would be for on-balance volume (OBV) of the SP500 futures to break under the 65 day moving average (65 days~= one quarter of the year). OBV has stayed above this moving average, except for a day or two, ever since March 2003. June is the month that SP500 futures switch from the June to the September contract so we'll also watch closely to see if the open interest (number of contracts held by overnight and longer traders) drops indicating that some players jumped ship.
The open interest of legal commercial or financial institutions who are hedging portfolios showed a major increase last week in net shorts in the combined, size-adjusted futures and futures options contracts. We don't know what they are seeing, but it might be somthing like their version of my chart: something which makes them thinks stocks are in for a tumble. They are the "insiders"-- quite legally too-- and they are in a much better position than we are to know what's going on. (Click on the image for a full-sized popup of the chart.)
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