Is This the Start of a Downturn?

We again have very difficult upside movement in the markets after the long and strong advance. The first chart, below, gives us a close-up whereby we can see the very narrow trading range and the lack of price movement. This has gone on for five sessions and has produced two entries last Friday and yesterday, which are typical "red cross" entries on the Arms Candlevolume chart, and are so typical of high points in markets. So far it is just a sideways move after the advance, but it has been enough to look like at least a slowing of the uptrend, and perhaps the start of a downturn. 

The second chart gives a longer-term look, and emphasizes the persistence of the advance. Not since 1987 has a move been so protracted. But remember, the 1987 advance was followed by a 40% correction in the Dow. So caution is certainly in order. ...164 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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