- We are close to getting overbought (Daily is hovering around the high range of the "normal" spectrum). Here's a nice advantage to improve the trade's success odds.
- For the of the month, we are almost at R3!!! I looked the historical for the last year (not putting them here, don't wanna clutter this chart), and SPY hasn't reached R3 on the recent past. Looks to me like too-far-too-fast..
- Trading on an upper and wide Bband, which isn't per se a sell signal, but it reinforces the better odds on this trade.
- ECB is coming on March... I expect some big guys to sell the news (just a hunch).
- Lots of noise in EM; Petrobras and Russia were downgraded to junk (Brazil sovereign may join them soon); Chinese economic data continues to disappoint; etc..
- Some big misses in US macro data in the past month are pointing to a weaker-than-forecast start of 2015. This is a two-edged sword, since bad economic data will delay the Fed rate hike (that has been discussed to death in trading desks around the world... Im getting sick of it, actually); but it will certainly weigh in on sentiment, specially if the trend continues.
- USDJPY (the "risk-on/risk-off" asset I think has the biggest correlation with SPY ) has been stuck in a range this year, and now sitting at the middle @high 108s, A quick analysis there suggests to me it could go down ( SPY would follow).
- USTs (another risk-on/risk-off aset I track and trade upon) also show signs here.
I've tried to short this rally a couple times before and got burned, so I'll be disciplined with the setup. My vision remains, though: I'm not buying these new all-time highs..