DeMark Sequential : One More Post Before The Holidays
I received a soft sell signal on my intermediate term trading model a few days ago. I say soft because the most important data point, a volume related measurement, issued a sell signal but I'm not getting any confirmations. Yet. What is interesting is the DeMark Sequential simultaneously issued a sell on the S&P 500 weekly charts. Since the S&P 500 is the preferred trading vehicle for professionals and most quantitative oriented trading money uses the DeMark Sequential in some form, we may be at a correction point. Big correction? Small correction? I wish I could divine the future but my long term model keeps me in cash or defensive if one is a buy & hold investor.
Last week I mentioned the big blow upwards after a month long consolidation in many indices might have been the final hurrah in progress. That coincides with the DeMark signal so I cheated a little bit. I don't see any reason to consider a change in trend yet but I do find a few things worth following.
@Just last week a Wall Street perma-bull declared the S&P 100 is headed to an all time high. I think it's safe to assume he doesn't follow DeMark.
@The Transports still have not made a new high and one rail company recently spoke of business weakness as I recall. A correction before the Transports hits a new high could initiate a lower high scenario that would provide a general uneasiness or outright sell for Dow Theorists.
@Most industrial commodities are weakening or worse. That included copper which I wrote about in the Phelps/Newmont trade. A trade that was developing nicely before being crushed by Freeport's takeover bid for Phelps. (A poorly timed and foolish bid without any consideration for risk management in my estimation. Maybe I need to think about shorting Freeport for being a little dull in the use of their cranial vault. Not really. They have a dividend and no outright shorting on dividend stocks for me.)
@The broader market indices including the Nasdaq, Russell 2000, midcap indices and Value Line are perched just above or below the May highs. A correction might pull them well below the May highs and initiate significant selling. ie, A potential false break out.
@Semiconductors are still languishing in a bear market which started nearly three years ago. They are showing renewed strength over the last week and are many times the last sector to show strength on a rally.
@The Banking Index still has not moved more than about 1% from its May high as I have noted time and again.
Let's see how the DeMark Sequential progresses out of curiosity.
Last week I mentioned the big blow upwards after a month long consolidation in many indices might have been the final hurrah in progress. That coincides with the DeMark signal so I cheated a little bit. I don't see any reason to consider a change in trend yet but I do find a few things worth following.
@Just last week a Wall Street perma-bull declared the S&P 100 is headed to an all time high. I think it's safe to assume he doesn't follow DeMark.
@The Transports still have not made a new high and one rail company recently spoke of business weakness as I recall. A correction before the Transports hits a new high could initiate a lower high scenario that would provide a general uneasiness or outright sell for Dow Theorists.
@Most industrial commodities are weakening or worse. That included copper which I wrote about in the Phelps/Newmont trade. A trade that was developing nicely before being crushed by Freeport's takeover bid for Phelps. (A poorly timed and foolish bid without any consideration for risk management in my estimation. Maybe I need to think about shorting Freeport for being a little dull in the use of their cranial vault. Not really. They have a dividend and no outright shorting on dividend stocks for me.)
@The broader market indices including the Nasdaq, Russell 2000, midcap indices and Value Line are perched just above or below the May highs. A correction might pull them well below the May highs and initiate significant selling. ie, A potential false break out.
@Semiconductors are still languishing in a bear market which started nearly three years ago. They are showing renewed strength over the last week and are many times the last sector to show strength on a rally.
@The Banking Index still has not moved more than about 1% from its May high as I have noted time and again.
Let's see how the DeMark Sequential progresses out of curiosity.
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