2012 Double Top?

We don’t and nobody knows for certain.  The big reversal in Apple yesterday raises concerns and the whack a mole of the major indices, at least, takes a little complacency out of the market.

The big question in our minds is were those real sellers or just traders and short sellers who spanked the market yesterday?   If the later, and if they don’t see real selling and some bearish news to confirm their positions,  we know they’ll be scrambling to cover.

Our sense is the market needs to rest and consolidate here.  It would be healthy, in our opinion,  for the S&P500 to trade down to its intermediate trend line, currently around 1380 and hold.

That is how we see it setting up.   Could be wrong, always flexible, and always with a stop.

(click here if chart is not observable)

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2 Responses to 2012 Double Top?

  1. Yeah, everyone always calls for the market to fail at double tops. Unfortunately for the shorts most double tops in an up trend fail. They’re good for a short term trade, but usually get broken to the upside in the intermediate term…as the trend continues upward.

  2. Pingback: Wrapping Up Sector AD Back Testing… | Prudent Trader

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