Sunday, February 21, 2010
A bit extended
Stocks have moved up for several days in a row on contracting volume, indicating a lack of demand. Then on Friday the indexes were up higher in the day but sold off toward the close to finish almost unchanged, on an increase in volume. This kind of action is reminiscent of a Climax High signal.
The chart below shows the daily numbers of Climax High and Climax Low signals plotted in red and blue in the top two windows. You can see how they come and go in waves. Starting in the 3rd week of December we saw a wave of Climax Highs kick in. It lasted over a month. Then came the wave of Climax Lows, leading to the eventual reversal upward with the Climax Low signal in the DJIA itself. But now this wave appears to be finished, and the Climax Highs are kicking in again.
I think we can expect a pullback next week, probably starting on Monday. Here's the chart:
The chart below shows the daily numbers of Climax High and Climax Low signals plotted in red and blue in the top two windows. You can see how they come and go in waves. Starting in the 3rd week of December we saw a wave of Climax Highs kick in. It lasted over a month. Then came the wave of Climax Lows, leading to the eventual reversal upward with the Climax Low signal in the DJIA itself. But now this wave appears to be finished, and the Climax Highs are kicking in again.
I think we can expect a pullback next week, probably starting on Monday. Here's the chart:
// posted by gigascanner @ 8:26 PM 
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