Fellow momentum leader SOX is potentially double topping…
Fellow momentum leader RUT is okay, but working on its 3rd down day in a row.
Headline indexes SPX, Dow and NDX all are potentially double topping.
VIX is still at a depressed level, implying that players have not yet started to feel any anxiety.
I think that we might want to feel at least a little anxiety before the herd does and be cautious on the US stock market.
If this analysis proves wrong then the indexes will break their short-term downturns of the last few days and break toward new highs. I would note that Junk Bonds are rising and their ratios to Treasury bonds are stable, so that is not a negative divergence to stocks at this point.
Speaking personally, I am raising cash levels and locking in gains until the picture clears to present either bull continuation or an actionable bearish situation. By way of example I am still holding SIMO (NFTRH+) but took profit on GOOGL (NFTRH+) and have been generally making sure I reap the profits (limit the losses) I have worked hard for. I am applying this method (disciplined swing, not day trading) across all positions with the understanding that there will always be new opportunities, whether bullish or bearish.
I am also by the way, skimming some profits on the gold stock sector, not that my exposure was very high to begin with. But again, the idea is that it is a long year and plenty of opportunity will be presented if patience is used. My goal, which may not be the same as yours, is to play market ‘swings’ until a new big picture trend emerges. Please use these notes for reference with the understanding that what is right for me is not right for someone else due to our unique situations.