High beta name Goldman Sachs has rallied since summer 2012 ~ +75% and from the last consolidation period Nov/Dec ~ +40% . That is very very impressive , chapeau !
Pure coincidence there is a perhaps a meaningless Fibonacci price and time extension knocking at the door, accompanied with a huge steep rally and overbought situation.
Is this the top ? How dare I call it, this would be pure guessing, but since we are all in the guessing business , would I rather be long or short here ? I will give it a go and look speculative short set-up for targets around bumping on the coming in a couple of months. I don't like flag-stick patterns but it is tough to call tops. Maybe this is it, maybe not yet. But a "healthy" correction or consolidation is overdue. Nothing last forever. Buy dips later again, but for now I can not resist to try a short.
true, volume doesn't support a climax. But to be honest, this could be a trade out of the blue, picking tops is pure coincidence and luck.
What I meant to say is the overall market seemed stretched after weeks of rallying. I just expect a consolidation or correction (at least). Options are too cheap (VIX) and nobody seems to expect any downside. Hence I am also short S&P, long VIX, but this trade here - shorting GS - should work as well if the market topples. Yes of course I will trail this position (probably with super trend or Volatility Index or SAR Parabolic, but this I can do only once this top is confirmed as a top. Otherwise I will use 2 ATR for the beginning.
I also reckon that smart money have already reduced long postions earlier. It is most likely retail crowd which is chasing the rallies now (look at the money flow out of bonds into equities). Seasonal patterns also suggest end of Jan / mid Feb could be good points to unload longs and buy weakness into March.
But first things first. Let's see how this trade get's momentum. Nothing is confirmed here, just a hunch. Let's be honest.