I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Wednesday, October 12, 2011

Oct 12

As I said yesterday I thought that it looked like consolidation and that there would be a move to test the top of the range. Check.

So now is where things get interesting. My 60-min Trend System issued a (quasi) sell signal today. See here and here (These updates are sent out as part of my Trend System Notifications).

Now I say a quasi sell signal because my main indicator has not officially triggered one. It is slowing down but it isn't there yet. However:

- 3 secondary indicators have issued sells (these are normally confirming indicators)
- The move has gone back to the top of the range (resistance for the last 2+ months)
- The move is overbought on several <=60 min timeframes
- My system made 10% off this move in about half as many days.

So I am calling it good :)

I will just wait to see how this overbought condition resolves itself and wait for the next 60-min signal to materialize.

However, like I said on Monday, my Daily System issued a buy signal. So that means whatever happens in the next couple of days, I think there is more upside to come in the following weeks. I still think the risk on the intermediate term is to the upside, not the downside.
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