Take a look at the S&P chart below dear readers. Does anybody else see a rounded top being formed? I certainly do. It makes sense that a rally so strong will undergo a slow topping formation rather than an inverted V or sudden spike down. It's been five consecutive days of churning on the S&P, with the market not closing at or close to the highs on any of these days. A few days back, I had written that the gold bugs needed to come in soon for the short term bullish momentum to maintain and they responded emphatically the very next day. It might be time for the overall market bulls to do the same. No way I am turning bearish here but no market can go up forever, and this market seems to be entering a decisive stage now. For this rounded top pattern to break, we need to see a big move up.
With my strategy of ending each day with a sizable cash position, I couldn't care less about which way the market finally moves. I enter today with a position in HUN that showed up in my intraday scans yesterday.
Take care and good luck!
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