What Buying Climaxes Are Telling Us
Well as the old saying
goes, each lame trading day brings us closer to a better one. By my
count, worst-case scenario, we need to rattle off another 22 trading days before
the coveted post-Labor Day “trading season” begins. In the meantime, do not
fret, you cannot impose your will on the market.
I came away with mixed results yesterday. I had
both long and short positions on, but without a meaningful trend, it just turns
out to be pure chop. Nonetheless, you need to dip you toe in the water just in
case a meaningful trend does develop — call it tuition.
So as a result of yesterday’s action, the spring
is coiled even tighter. Will it be today’s employment numbers that breaks the
range, or tomorrow’s GDP or PMI report? I honestly do not know. I am only
certain that if I keep my powder dry I will be able to take advantage of the
volatility when it comes about.
Nonetheless, I thought that this information
below was rather interesting:
“From Investor’s Intelligence
we receive the run-down on “buying climaxes.” Four weeks ago we saw a record
number of buying climaxes. But last week buying climaxes totaled a new record
531 buying climaxes. Buying climaxes occur when a stock rises to a 52-week high
but then closes down for the week. Buying climaxes represent distributions. The
531 buying climaxes recorded last week smacks of across-the-board distributions
by investors who are slowly and subtly “cashing out. Yesterday was also the
second day in which we saw the VIX close below 20. I take this as simply “too
much complacency.”
Source:Â Richard Russell
As mentioned in yesterday’s column
there is just too much evidence on both sides to allow the market to get too far
one way or the other. So we wait.
I appreciate all the positive feedback on
yesterday’s column, I will certainly be doing more of that type of analysis.Â
Nonetheless, I am open to suggestions for upcoming columns. This is a great
time to offer other insights or perhaps review methods and disciplines. Just
drop me an email and I will be happy to consider all suggestions.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
||||||||||||||||||||
|
As always, I welcome your comments and feedback.