It's Nearly Crunch Time
Crunch time approaches. Look at the chart below of the S&P 500. The two lines that enclose the prices are called Bollinger Bands, named after the groundbreaking work of John Bollinger. The two lines get close together during times of indecision, and here it is apparent that they are reaching an almost unprecedented closeness. Historically, that happens at market tops, whereas the lines tend to be far apart at market bottoms. So, as the current standoff is resolved, which seems imminent, the likelihood is that it will be resolved to the downside.
The standoff has gone on so long that the 10-day moving average of the Arms Index has moved to a quite neutral condition, but the longer-term 21-day average is still warning that it is overbought. If you went short when suggested, I would recommend holding those positions. If not, it still isn't too late....258 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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