The Elder Impulse indicator now has four blue bars. In the past this condition has usually preceded a down turn. This is one more ancillary indicator that is stalling. Remember, tops are a process and we usually see indicators fall one at a time until they reach critical mass and cause the market to fall. We’re still a long way away from any warning from the totality of indicators I watch, but every day it seems one more caution sign appears. It’s time to make a list of stocks you wouldn’t want to hold during a down trend…and think about other methods to hedge your portfolio.
The NYSE Advance/Decline (NYAD) line is painting the largest divergence in nearly a year, but still isn’t at a critical level. As I’ve stated many times before, I don’t think the market can suffer a substantial decline unless breadth breaks down. Keep an eye on NYAD, stocks above their 200 dma, and the bullish index.
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