Wednesday, March 3, 2010
And now come the sell signals
There was another pulse of Climax High sell signals today. The chart below of RRY (Rydex 2X Russell 2000 ETF) is illustrative.
The daily numbers of Climax Highs and Lows are shown as indicators in the top 2 windows, in red and blue. They shift back and forth in waves, anticipating the price. Note for example the wave of Climax Highs in late December and January that proceeded the price decline. Then, about halfway down, a wave of Climax Low buy signals started kicking in.
The Climax Highs have been kicking in again recently, especially today with many of the broad-market ETFs showing signals (the chart below of RRY for example). The market will probably go down for a few days. But keep in mind that these signals can be extremely short-term in a bull market, as there will be numerous bouts of distribution (large-scale selling) on the way up. Climax Highs signals also tend to occur in a handle formation as it consolidates to a near-breakout. As noted in the previous post, RSU is currently forming an apparent handle in a cup-and-handle pattern (which is a bullish setup). For that matter, the chart of RRY shows a similar cup and handle except it's acting a bit stronger, having moved up out of the handle a couple days ago.
The daily numbers of Climax Highs and Lows are shown as indicators in the top 2 windows, in red and blue. They shift back and forth in waves, anticipating the price. Note for example the wave of Climax Highs in late December and January that proceeded the price decline. Then, about halfway down, a wave of Climax Low buy signals started kicking in.
The Climax Highs have been kicking in again recently, especially today with many of the broad-market ETFs showing signals (the chart below of RRY for example). The market will probably go down for a few days. But keep in mind that these signals can be extremely short-term in a bull market, as there will be numerous bouts of distribution (large-scale selling) on the way up. Climax Highs signals also tend to occur in a handle formation as it consolidates to a near-breakout. As noted in the previous post, RSU is currently forming an apparent handle in a cup-and-handle pattern (which is a bullish setup). For that matter, the chart of RRY shows a similar cup and handle except it's acting a bit stronger, having moved up out of the handle a couple days ago.
// posted by gigascanner @ 9:10 PM 
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