Monday, February 14, 2011

Top Moved Higher

The market action at Friday's close is more consistent with breakout than capitulation. The put/call ratio suggests the same:

Indeed, the ratio made a bearish spike on a bullish day. This usually tells me that the market has some room to grow and this is the main reason I started covering. I will cover the other half of my position today as soon as I see some indication of strength.

I still expect a top in the following period but from a little higher level. Given the recent market rhythm, I expect it around 1341 SPX.

SPX hourly chart

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