Many Signs of a Top
The markets continue to look comatose. On the first chart is the trading range of the S&P 500 smoothed over a five-day period. Note two things: First, a series of tiny trading ranges is symptomatic of a market high; second, we are now seeing the most extreme levels in years.
Also, as noted two days ago, the Volatility Index (VIX) is at an extremely low level, reflecting complacency, and a sign of a market top. In addition, the very low volume in the last few days tells us of a lack of interest, also usually a warning of lower prices ahead. Put all that together with overbought readings on the 5-day, 10-day and 21-day moving averages of the Arms Index and it suggests staying away from the long side, and even putting on short positions....269 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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