Let's do a quick replay on the stock market over the last week. After surging dramatically higher, the S&P 500 went sideways for four days (1). Yesterday, it broke out to the upside on the lightest volume day of the year (2). Remember, super light volume means no big money is buying. That is a warning sign right there. The biggest signal is coming today with a 100% reversal of the upside from yesterday (3).
When a stock or in this case the stock market breaks out of bullish consolidation, only to reverse 100% of the move the next day, it is known as a failed breakout. Coming at all-time highs this is an extremely bearish signal for the overal market. Note the chart below.
To follow my exact live trades, verified by Verified Investing, sign up and opt into them. You only reward me when I give you winning trade alert information. Revolutionary idea changing the investing world for the better!
- - -