Sideways Trading Likely Leading to Slide

In spite of the wide swings in the averages over the last three sessions, the net result was practically nonexistent. In fact the S&P 500 (SPY) is just about where it was 12 sessions ago. This sideways zone comes in as the S&P struggles just below its 2007 highs, and indicates there is huge overhead resistance. Moreover, the very low VIX, the low trading volume, the narrow trading ranges and the low absolute percent changes, the APC, all are warning this is continuing to look like a high point in the markets, and is likely to lead to a substantial slide.

The short term Arms Index moving averages have moved away from their very overbought levels reflecting the recent back and forth moves. That does not mean they are calling for a rally, just that they are reflecting indecision. This does not look like a time to be turning bullish....227 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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