The Red Light, and what it means
Today the RumWave predictive model produced a "sell" signal. Appropriately, I have turned on the Red Light. It is important to discuss what this does, and does not mean.
What it means: The stock market is at a point that is likely the high point for the next 10-20 trading days.
What it doesn't mean: Bet the farm on short positions.
My interpretation of this iteration of the red light is that we are likely to see a 3ish percent pull back before resuming the upward move. My favorite Elliot Wave blogger suggests that Wave 3 just completed with Wave 4 constituting a pull back. Wave 5 should take the market to new highs. I agree with his assessment. I don't think the decline will be a long lasting one.. maybe a week or so.
I'll begin keeping track of the "UltraWave" score on the scoreboard using a ticker symbol called SDOW. It is a 3x inverse ETF of the DJIA.
GOOD LUCK TOMORROW!