The State of the Trend

By: George Krum | Sat, May 18, 2013
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Two weeks ago we concluded that market breadth is just bottoming out, and the pendulum should be swinging in the overbought direction. As the chart below shows, that swing is now almost complete:

CIT Dates Chart

On Friday, Reuters reported that May consumer sentiment is the highest in nearly six years. This is confirmed by the Bull/Bear ratio which also reached multi-year highs on Friday:

SPX Chart

Although extreme readings in this indicator by no means signal that a market crash is coming, they nevertheless indicate that the majority of those who want to participate in the current upswing are already in. Considering that the SPX is within reach of its upper channel target, and nearing overbought market internals, we expect that a sideways/down phase should commence shortly:

SPX Channel Chart
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George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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