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Wednesday, February 22, 2017

Market Update 2/22/2017

To be honest, like most technicians, I've been hard pressed to find the absolute top on this market.
I've been wrong a couple times, and that's to be expected when trying to call tops; calling tops is always more difficult, than calling bottoms. But I haven't been all wrong either. Most recently getting bullish again going Friday's close. The main reason for that, is that the trend is not broken, and going into a long weekend, short sellers are bound to get squeezed, and Voila! I keep telling the bears not to sell into a holiday, but some folks have to learn the hard way.

The say, "the market can stay irrational longer than you can stay liquid", and that's true, but when the rallies over-extend I get anxious, and to add to my anxiety, my long term charts scare the bejesus out of me. The $VIX also remains off the most recent lows, so there is real fear in this market.

Speaking of fear: It finally occurred to me last week, that scared money is most likely exiting ahead of Brexit, and finding it's way into US markets. No doubt Trump policy has certain retail investors excited, but Trump policy is unlikely to have any affect on markets for some time. Are we pricing in corporate tax cuts, and deregulation? Perhaps, but if that's so, then we're going to sell the news. I think the market is looking for a reason to sell-off, but the market often climbs a wall of worry.

Digging deep this morning. Spent several hours updating charts, and running late on this update.

Banks have lead, and here's the trend. I don't like the fact that it's trading into the apex of a triangle, and the reversal could be swift. 3X financial bear $FAZ is in play.

The Trend on the Dow isn't broken, but I can't recommend chasing this. $TRAN leads the Dow, so I was taking a close look at that yesterday. It's struggling.

I haven't forgotten about NatGas, and my revised target - a few cents below 2.70 - is being tested this morning. Hopefully we don't see a washout below support like we saw in gold.

$Oil tried to break out, and if $WTI crude makes a new recent high - above 55.25 that becomes the stop hunt.

The $RUT may have made a new high, but it failed to break out of the top of the pattern (reveled last week).
Today's open looks like this on a 5 min chart.

$Gold miners pulled back to support, bounced out of the hole, and seen back-testing that breakout (new support) this morning. Fear trade?

A final note: I plan to unveil my long term, "charts of doom", to be published on (public), before the end of the week.
Meanwhile here's just a taste... Major top on the banking index.

Take Care, AA

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