"I've Been To The Mountaintop"

 Well, let's see, bullish in the morning, bearish in the afternoon, and when all as said and done, we ended up right back in the same place. We broke 1185 but that fif not last lone. and it could be the final thrust in a rally that is rapidly losing steam. MACD is flipping over and the histogram has gone negative, so any upside momentum there is gone. ATR is starting to rise, meaning that volatility might increase here. Volume has also been pretty high for the last couple of weeks, and that could be a sign of topping out. Anyway, 1180 has been my target for quite some time (I don't remember exactly what lead me to believe that), and we are there.

 This is the percentage of stocks on the Nasdaq above the 50dma, which so far has been a pretty good indicator of how strong the market is. I have 2 levels which I watch, 50, which is the rally mode level (when it is above 50 we are safely in bull territory), and 30, the correction mode level. Between 30 and 50 is normally a transition zone, and a good indication of a trend change. I think I will be adding a third level, 70, which is
sort of like 80 on the RSI, and overbought indicator. When we get above 70, that means even a lot of crap stocks are above the 50dma, a stituation which is probably not sustainable for long and an indication of a short term top. All of this is speculation on my part, but my very limited research on the subject has so far borne that out.

The same indicator on the NYSE. The NYSE composite price is in the top oanel for comparison. The levels on the NYSE may be slightly different since there arre so many ETFs here, but the principle is the same, and you can see that once we got above 70 it slowed down dramatically, topped oiut, and is now declining.  I will have to do some more research to see if I can come up with more reliable levels here, but this gives a rough idea of the strength of the market.

This is the new highs on the Nasdaq. Here again are levels i watch, and the new one here is a little harder to come up with since we are dealing with raw numbers rather than percentages here, but it does not appear to me that the number of new highs has gotten extreme yet. We are now near the top of the transition zone and it could go either ay. This isn't giving up too many clues yet.

If I use the same numbers on the NYSE, it is comfortably in bullish territory, but then again, that could be skewed by the ETFs. So far the new highs are inconclusive, the stocks over the 50dma leaning bearish. One of these days I will be doing more research to this to see if I can come up with something more conclusive.

I'm still a little slow this afternoon, but feeling much better than I was this morning. Hopefully a decent night's sleep will get me ready for tomorrow. Thank God for stop loss orders.

I will have the new highs update shortly.