I've gone short again as of Dec 21st, Trade 41 (See below), at 2659 closing entry (My Trade 40 was stopped out in the overnight flash-crash, Dec 20th, highlighted below, that took the Index from 2687-2637, -50pts on 10,000 lot algo-driven short push. I took that as an ominous market signal that things are not looking good for stocks.)
First stop on our visual-chart tour is a view of the position of the current bull market via the weekly line chart (Blue line), from a momentum overlay perspective as per the 20 week ROC indicator (Red line). This shows successive weekly price highs (blue line) in a ongoing bull with corresponding lower momentum highs (red line). The latest Sept 2012 weekly price high shows a widening in the momentum divergence and into the latest short term price 'rally.' These consecutive, longer term divergences in momentum characterize late-stage-exhaustive conditions in the tech-space -- and a cautionary signal for 'would-be' tech bull investors.
We also need to pay close attention to the leading players in the Index as they are the price-drivers of future gains/losses. I've highlighted (blue circle) visual liquidation bars (day-bars) of AAPL, PCLN, AMZN, ISRG and GOOG in the charts below, all generated in recent weeks with corresponding divergences in short term momentum as per the 14 day ROC indicator in the lower 'tile' of the chart (blue circle highlights). These 'Red' bars are important liquidation events which I believe bodes ill for the individuals names 'bull-trend' continuation and more importantly the Index into 2013.
AAPL:
GOOG:
PCLN:
ISRG:
AMZN:
