Answer: New all-time highs [more or less]
This does not mean that every new all-time high is a top. There are periods in the market when new all-time highs are printed consistently with little to no pullback. Think: a high degree wave 3 or a wave 5 particularly. The odds outside of a wave 3 go up marginally at first and then substantially when key extension levels are being hit [inside a fifth or concluding] wave together with declining breadth at the weekly level. Such is the possibility currently.
Cannot say his enough-
Look at the chart on the Dow progression. Quite possibly more to go on this last leg since the current move up from the low on 2009 appears to be a fifth wave in a 'nested' 1-2, [1]-[2], [3]-[4], 3-4, [5?] leg and wave 5 now exceeds wave 1 length which during a 'nested' leg often is limited on how far it will extend from here. Often wave 5 can equal or exceed wave 3 length in non-nested legs. In this case a potential wave 5 has now exceeded wave [3] [inside nested leg] but has not equaled the larger degree wave 3. If that were to be the ultimate target [a HUGE number on the Dow], it is doubtful it could achieve that easily without a completely new structure forming so we go with the more likely top being just around the corner. More breadth decline is required to accomplish this.
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Summation index has rolled over for all indices which was missing in the past, stocks above 50 & 150 DMA is making lower low. I agree, breath indicators are not looking good. We could be in pivot action.
ReplyDeleteVarun- Thank you for your observations. The situation in the markets overall that we see is that we have arrived at some critical 'markers' with vectors. These positions are calculated using extensions to vectors that commenced around 3/23/2020. At least two 'coupled' vectors are used, wave 1 and wave 3 down if you will. Historically they indicate that a target area has very much been entered. They also often coincide with much lower breadth numbers than we are currently seeing so either there is more to go regarding vector targets or the market may respond dramatically to catch up so that 'typical' topping parameters come more into alignment. Either way- there could be some interesting developments going forward. Some of those could be stressful to those who are holding. We may be seeing a very unique set up in the total history of the market. Stuart
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