Wednesday, August 31, 2011


The market made a surprising (at least to me) new high and it was about to close in the negative until the last few minutes of trading where it was able to reverse what was going to be a bearish reversal day. Whether the market top for this wave is in at 1230 or make one more push before breaking out of the wedge, odds favor prices turning lower now. The overbought conditions and other indicators point to a top in place. Below are the daily McClellan Oscillatory and another indicator I like using which is the percentage of stocks over the 20 day MA, they are usually very reliable at extremes and they point to conditions ripe for a reversal. I sold my positions from 1180 and went short on my trapped long position at 1226 (I was previously hedged).

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