Well, friends, Friday was a great day to lighten up on some positions and book some profits. Like I wrote on Thursday, market sentiment is extremely bullish and thus we are likely to see some battles take place between the bulls and bears. On the charts in this post I'm going to back out the scale a bit and we'll take a look at weekly candle views. Remember, try not to out smart your common sense on these.
First, the scores:
For the charts below, I've turned on one of my favorite oscillators, Bollinger %B. It is the light blue graph at the bottom of each chart. Bollinger bands are useful tools to show when the market has moved too far away from a specified moving average. When the bars reach the 100% level, the price of the underlying stock (or index in this case) is 2 standard deviations away from the 20 period moving average. I'm not going to write a lot about each chart, but just look at where we are on the top graph, where we are on the %B graph, and what has happened each time we have reached these levels in the past 2 years.
**NOTE** - I AM NOT IN ANY SHORT POSITIONS AT THIS TIME. I'm waiting for a little more confirmation that the trend is changing. Specifically, I'd like to see the DJIA 20 day simple moving average take a downward slope as confirmation of the trend change.
GOOD LUCK NEXT WEEK!