Switching to BOT Short Signal Some possible Cracks in the Foundation

I am switching to a BOT Short Signal right now at 12:06 PM Eastern time at 1173.20 on the sp500.  I am seeing some possible cracks in the foundation of the current uptrend and I think it is prudent to be cautious at this juncture.

The NDX is hover right at its 2010 April highs and I just do not think it is going to jump higher again and just keep zooming.  There are also several overbought levels I am seeing on numerous indices.  I mean one would think there has to be at least a few people that want to ‘take their money and run’ who bought right at the top of the April 2010 highs.

The Dollar index is also at the supporting boundary range of its large symmetrical triangle and could be overdue for a bounce.  The VIX seems to be getting some minor running legs.

Also we are currently at the 78.6% retracement level of the decline that began in April 2010.  This is a potential Fibo resistance level which the market may have trouble with.

And lastly but certainly not least, the BKX Banking index is behaving very badly.  I do not like it when indices or stocks start to behave badly because many times it is someone who ‘knows something’ getting out ahead of everyone else.

It looks like the BKX had a false topside breakout of resistance and as of today a break down below back into the down trend and also below the up trendline support since September.  This is not good and is concerning me.  Perhaps the sp500 is a bit too complacent now.

I am not all out bearish right now, but I need to pay attention to this possible warning sign.

If by some miracle the NDX blasts above the April 2010 highs and then keeps zooming, I may have to concede this as a whipsaw signal.  For now this is a ‘probe short’ signal if you will.  Wait and watch seems prudent.

If it evolves into something more severe on the downside, then I may have to adjust my intermediate and longer term forecasts.  But one step at a time.

bkx20101014

So this may turn into more of a developing story.  Wait and watch here.  Bot Short Signal Active.

Posted in BOT Short Signal, Index Trading, NDX 100, SP500, Technical Analysis
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4 comments on “Switching to BOT Short Signal Some possible Cracks in the Foundation
  1. Geoff says:

    thank you for your post

  2. Tom says:

    Your welcome…

    Still researching whether or not this was the right decision…

    This guy points out some of the same things I noticed today:

    http://themacronavigator.blogspot.com/2010/10/boy-and-girl-plungers-start-your.html

  3. bobo says:

    Much better view , honesty i lik it, something is coming

    what i dont know, but look up

  4. Geoff says:

    thank you for the link to macro navigator. very interesting. the current channel from early Aug is really quite steep.

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