For those of you who look for price patterns, the "terminal" pattern is the most opportune pattern there is. The reason the "terminal triangle" is so powerful is because it creates a psychology that is extreme in the sense that each dip is less and less and each dip leads to a new high. Investors literally become euphoric. Investors become immune to risk and begin to look forward to the sure-thing of another dip and more money to be made, the easy way.
What is the fascinating part of this uptrend is the way the terminals are layered on each other.
Is the market ripe for a fall? Maybe. Many economic indicators are pointing down and should be making portfolio managers wonder where the earnings are going to come from. Stock markets can roll over for all kinds of reasons and it is usually something logical, but usually "after the fact" is it logical. Decide for yourself, but the pattern here is telling me that people are "Frothy bullish" and that means there is more downside potential than upside.
Do I hope I'm wrong? Yes. I'd like to see higher stock prices since a bull market helps us get out of a recession, in theory. However, I'm a realist too and look for times when the odds are stacked in the favor of one side of the market or the other.
I'll make a list of all the bullish and bearish factors and we can all weigh them collectively - on another post in the near future.
Trade concept: SHORT AT 124-124.50, cover 119 and 114. Re-short at 117 and 120, then cover at 110-104.
Cheers.
Tim 12:28AM EST, Monday, May 18, 2015 123.65 IWM
Comments
timwest
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From the "KEY HIDDEN LEVELS CHATROOM" this morning - from not long ago (Now it is 10:49AM EST on Tuesday May 19, 2015) "IWM has many of the signs to indicate "this is it" - time to get on board short here. Why? No follow through after the range-expansion up-day yesterday. Tiny inside day today. Rally back into March-April supply levels (Break-even-itis-type of selling could happen here). My RgMov indicator is at lower and lower highs over the past year which signals distribution. Tight range = tight stops too = bonus for entering short here."
Justiceisfalse
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Hell. Yes.
Justiceisfalse
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Dont think we will see 125s
timwest
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That would be idea if it just sat here and ran out of steam. This rally puts IWM right up against the broken trendline that many will catch after the fact, or after it rolls over from here. Even if I'm wrong here, I am not risking much at all. IWM is hard to pin into a corner and it has pinned itself into a corner for us. We just had to wait and watch long enough - so let's take our chances now.
look4edge
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hi, r2k shortterm weak, leading diagonal over, now correction running, got setup tgt 120.5/115