Thursday, August 16, 2012

Be Alert for a Reversal Here

As of today, the maximum time I'd expect for this move up is upon us.  Additionally, the daily RSI has touched above 70 on the S&P 500 which is overbought, and in a range environment will typically give break signals.

The ADX is rising on the daily chart as the market is rising here, so we should respect that a new uptrend may be beginning, but it currently is at about 16, whereas 20 is the textbook level to define a new trend.  So again, we are either at an imminent reversal point, possibly even this afternoon, OR the market is likely to continue a tight trend higher for several weeks.

The NYSE is poking above the 8060 resistance level I had mentioned recently.  It is pretty common for price to go completely through a resistance zone, at least intraday, before reversing.  So we should watch to see how it reacts today and tomorrow.

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