[Market Technical Analysis] Important note today – Upside exhaustion signals on some major indexes with extreme sentiment

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via hedgefundtelemetry:


Let me be brief and to the point.  We now have bullish sentiment with equities at extreme levels >80% bulls in the US, Europe, and Asia.  This is what I call a condition.  There are now upside DeMark exhaustion signals on the S&P 500, Euro Stoxx 50, Euro Stoxx 600, DAX, India, China and near on Japan.  Furthermore, the blended global indexes have upside signals today too.  The DeMark signals work as a trigger and when sentiment is at extremes this is a significant development.  Rule of thumb when there are DeMark Countdown 13’s a price reversal should occur within the next 10-12 days.  There are still some significant stocks and sector ETF’s that have some more days before they get the Countdown 13’s.  I find the power in numbers when there are clusters of similar Countdown 13’s and when various markets have sentiment in the extreme zone.

I’m usually a little early and ahead of the markets and for sure way ahead any talking head on TV as they are talking about how wonderful things look today.  For further confirmation keep an eye on the PPO monitor to spot more sectors breaking below the 10 and 20 day moving averages.  That will take some more time.  Regardless, this is a dangerous setup that requires ignoring the FOMO and to take down risk NOW.   Lastly, I looked at the VIX today including the positioning which shows traders are set up the most short in 10 years.  What could possibly go wrong?


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Markets in an extreme condition – extremely bullish sentiment on stocks, globally, oil, bonds and USD. Also traders are the most short volatility in many years.

Markets are making a major top here. Lambs to the slaughter before too long I think.


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