Thursday, June 24, 2010

On the edge

Yesterday I gave warning signal, today I say, if one is not a pro, then go to cash.
Market always have a next day, but our wealth is limited. The strategy I show here is only make trade in safe circumstances. We don't need to play every time. Sometimes we just sit on the bench and observe. This VIX level is very high and hard to trade. Be safe, we worked hard for our money.

We could see selling effect again, large upswings suggest participants are not convinced, contra forces are strong. There was stagnating advancing volume against constantly pulsing declining volumes.

US market, SPX:

Long-term volume signal (1day): Long with warning.

Further volume readings from other, non-public sources: Yesterday I wrote: 'Selling institutional volume is clearly declining, however signals show a small remaining power-upturn need to be eliminated in order to have safe upswing price effect.' As bull is stagnating, this small selling volume was enough to push prices hard down. Unfortunately declining volume shows small recovery while bullish volume is not advancing.

What is a relief, advancing volume is above critical level, while declining volume under signal means more probability for a longer-term bullish continuation.

Momentum is in slight negative area, meaning bearish turn is not confirmed yet.

Short-term volume signal (15 min): Cash out


As we can see, bearish volume is still in accumulation phase, internal signals show slow exhaustion. Short-term momentum is negative since 22-jun-2010 9.45 EST, short term volume sentiment is low.