It's getting thin up here in the SPY (cash) ETF contract. Volume is seriously declining as prices are rising. Sure, there could be a couple more days up. The question is, "is it worth the risk?"
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| SPY (Cash) ETF - Daily - Versus Volume |
At least some bulls are apparently thinking, "maybe not". And what do the bears think? Try to find one to ask one.
Have an excellent rest of the evening,
TraderJoe
To describe the “supercycle top candle,” it’s often one of these:
ReplyDelete1. Blowoff / Exhaustion Candle
Huge range.
Gap up.
Big media excitement.
Closes off highs.
This is the cinematic version people imagine.
2. Repeated Small-Bodied Candles Near Highs
This is more common than people think.
Tiny candles.
Low volume.
Weak breadth.
Grinding advances.
The market keeps rising but “energy” fades.
3. Failed Breakout Candle
New ATH.
Momentum traders pile in.
Then reversal back below breakout level.
Very dangerous psychologically because it traps late buyers.
4. Outside Reversal Week/Month
At secular tops, the monthly chart can matter more than the daily:
* new highs early in month,
* sharp reversal,
* closes below prior month.
That’s often more meaningful than a daily hammer.
⸻
And importantly:
A hammer is usually bullish after a decline.
At tops, the bearish cousin is more often:
* a shooting star,
* gravestone doji,
* or bearish engulfing pattern.
But even those are unreliable at secular extremes because liquidity/mechanical flows can overwhelm classical chart patterns for surprisingly long periods. The deepest truth about supercycle tops is: they are usually processes, not events.
Distribution takes time.
As Galbraith wrote about 1929 in The Great Crash 1929:
“The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.”
On Everest, once you reach the summit, every route to safety leads downward.
DeleteYes I know another bear: all you guys check Keith Richards owner at valuetrend.ca
ReplyDeleteHis “homemade” technical signal based on multiple indicators is at 0 right now: highest risk level.
He also takes into consideration EW counts!
Transports are declining again today…