WEEKLY MARKET UPDATE

While the long term trend remains up, we are clearly in an intermediate term correction.  As you can see from the weekly SPY chart the week closed decidedly down.  It now appears to me that not only will price remain range bound, but the probabilities now highly favor a test of the lower green lines.  If you have been in the market for some time and haven't already taken off a portion of your position or hedged; now would be the time to do so.

This week I thought I would give you a glimpse of just one of the proprietary indicators that I look at to help me identify high probability intermediate tops in a long term bull market.  Take a look at the weekly SPY chart. Now take a look at the indicator in the lower window.  Notice that I have drawn gold lines on the indicator whenever it exceeds the upper green line and then starts to form lower highs.  Whenever I see this happen I begin looking very closely at the last weekly price bar.  If it is particularly bearish, that is confirmation that a high probability intermediate term correction may be in place.  I have drawn red down arrows on the weekly price bars the last four times this has happened.  Of course, I look to other things like sentiment to give stronger confirmation.  I hope you all have a great holiday weekend.