The current market positioning seems pretty vulnerable, where after a 5-years bull market, serious technical warning signals have been persistent within the past year. So a short seems an attractive call just slightly higher, as the reward compared to risk is high.
I have discussed in my earlier posts some of these signals, such as market breadth deterioration, add to that the bearish breakout in high yield corporate bonds shown on chart, note that HYC bonds have been diverging failing to confirm the upside in equities for more than a year now.(HYCB and equities have been positively correlated).
Another behavior that evolved recently is the out performance of consumer staples sector compared to consumer discretionary, within the past 20 years, tops were preceded by such behavior(which is logical as defensive sectors are more appealing to investors in risk-aversion environment).
If we get a move higher following the FOMC meeting, i will be looking to short near 2035.
If you want to read more about these technical deterioration signals, please check the related links below
Guys, lets make a small sentiment survey here, if you're bearish just comment "Bearish", if you're bullish comment "Bullish".. for the coming few months ..I think we could ask the question in different way, do you think the latest high is the top for for the coming six months, or no? ..... Thank you
Best of luck. Join me at twitter.com/thefxchannel
Also at my Facebook page www.thefxchannel.com
My best regards,
Technician
==================================================================
Trading Criteria:
1. Trades are taken in two units
2. First unit would be closed at first target
3. Stop loss is then moved to break-even
4. Second unit would be closed at second target
Notes:
5) If 90 percent of first target is reached I move stop loss to breakeven.
6) If 90 percent of first target is reached without triggering entry I cancel the trade.
7) Remember: Losing is a main part of the game
I have discussed in my earlier posts some of these signals, such as market breadth deterioration, add to that the bearish breakout in high yield corporate bonds shown on chart, note that HYC bonds have been diverging failing to confirm the upside in equities for more than a year now.(HYCB and equities have been positively correlated).
Another behavior that evolved recently is the out performance of consumer staples sector compared to consumer discretionary, within the past 20 years, tops were preceded by such behavior(which is logical as defensive sectors are more appealing to investors in risk-aversion environment).
If we get a move higher following the FOMC meeting, i will be looking to short near 2035.
If you want to read more about these technical deterioration signals, please check the related links below
Guys, lets make a small sentiment survey here, if you're bearish just comment "Bearish", if you're bullish comment "Bullish".. for the coming few months ..I think we could ask the question in different way, do you think the latest high is the top for for the coming six months, or no? ..... Thank you
Best of luck. Join me at twitter.com/thefxchannel
Also at my Facebook page www.thefxchannel.com
My best regards,
Technician
==================================================================
Trading Criteria:
1. Trades are taken in two units
2. First unit would be closed at first target
3. Stop loss is then moved to break-even
4. Second unit would be closed at second target
Notes:
5) If 90 percent of first target is reached I move stop loss to breakeven.
6) If 90 percent of first target is reached without triggering entry I cancel the trade.
7) Remember: Losing is a main part of the game
