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Short Term Sell Signal

Jul. 09, 2013 10:50 AM ET3 Comments
Kevin Wilde profile picture
Kevin Wilde's Blog
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The short term trading indicators show the stock market reaching extreme overbought condition in almost every indicator. All at a time where the S&P500 has run into resistance of the trend-line drawn from prior peaks, highlighted by the red dotted line.

Most interesting of all is the white VIX line approaching its most extreme complacency level seen in that entire chart. Note a cross of the lower white - entry - line, represents an entry on the SHORT side when the VIX is there and long when the yellow NYMO reaches that entry point.

Now the NYMO (yellow line) is on a sell - exit (longs) - signal, with everything else in this chart screaming sell too.

The S&P500, Dow Industrials, and NASDAQ 100 (QQQ) are all on day three of a rally above their respective 50 day moving averages, and it is common to see such moves last four days. Thus we may see one more day of bullish hope before the shit hits the fan for real, though don't count on it, as the next sell phase, one that may include a major crash, is in position to start at any moment.

If you would like to track updates on those charts you can take a five month free trial to my alphaking newsletter. Simply sign up for the 30 day trial at alphaking.com, click on the verification email, and we will adjust to five months. I run four tracking portfolios - so lots of stocks to buy and sell! - as well as a 401K advisory for those looking to make and protect money in their retirement nest-egg.


Disclosure: I am long PSQ.

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