Monday, August 20, 2018

How many pennies are left in front of the steamroller?

A reader commented on the weekend, "TBH, being long here sure feels like picking up pennies in front of a steamroller". I agree. While I have been steadfast in my belief of a "Last Hurrah rally" before a significant market top, that scenario is looking far less likely.

As the market tests a key resistance level, it is displaying both a negative RSI-5 divergence, which is tactically bearish, and faltering internals, which is intermediate term bearish.

There is a distinct possibility that we may be seeing a final market top in the major US equity indices this week. While the market may rally to new marginal highs, I believe that the risk/reward ratio is turning unfavorable for the bulls, and there may not be many pennies left on the road in front of the steamroller.

The full post can be found at our new site here.

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