It’s been a great year as we head into the final few trading sessions. The past several weeks the indexes have not done much of anything which is why we are now in cash.
I feel as though the market is about to change direction abruptly in the coming days or weeks. I feel this way for several reasons:
1. NYSE, Dow Jones, S&P500 are all drifting higher into resistance levels on the 10 day, 60 minute charts. Light volume tends to favor higher price hence the reason for the holiday rally.
2. Broad market momentum waves are topping
3. These same indexes are trading at resistance levels from early 2008
4. Money flow is indicating large institutions have been big sellers over the past 3 weeks.
5. US economy I think is worse than most want to think
So take a look at these 10 day charts which clearly show resistance and support trend lines. Each, if broken will lead to a sharp decline. I used ETF’s as substitutes for the indexes.