Trading Ranges Getting Narrower

The markets keep moving higher, but more and more reluctantly. Look at the first chart below. Note the small trading range on Monday. This is just the last of a string of sessions in which the trading range has become narrower and narrower. That is telling us that movement is becoming progressively more difficult. Such action is generally seen at the termination of a rise, which is what we are now approaching, I believe. 

The volatility index, the VIX, the second chart below, is staying in an area that indicates extreme complacency. Too complacent a public is dangerous. Again, it suggests an imminent pullback. The Arms Index moving averages, which were confusing last week because they were not yet overbought in spite of other indicators, have now started to move back toward overbought. We are close, I believe, to a pullback, but wait for it to actually start before becoming an aggressive seller....211 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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