Friday, May 6, 2011
The rally since the November 16th 2010 low--interupted by the a-b-c during Feb-Mar is getting mature. The technicals--RSI and ADX--are showing classic signs of an ageing bull.
As with the metals markets--perhaps all markets that have gone ballistic over the last 12 months--the equity sector may be about to shock complacent bulls. The behavior of VIX over the next three weeks will be very important in ascertaining the potential of the approaching intermediate cycle down-swing.
This is a really good time for investors who have benefited from the huge bullish moves in the markets over the last 2 years--think four year cycle--to remember the old adage--Bulls and Bears make money...but....pigs get slaughtered
The three peaks and domed house formation is back with a vengeance (point 24 or 26). The bounce will be very interesting to analyze...if the formation is valid, the golden bear is just waking from her hibernation.