25 May 2017

Who to believe?

Looking only at the NYSE for this post.

Sentiment is curently indicative of a top when looking at NAAIM, $CPC and $CPCE.

However using breadth to try and narrow down the timing for a top is not working too well at the moment.

First the indicators which concur with the sentiment readings and argue for a top any time now:

 When I look at the charts above it all seems fairly clear cut and logical... we are presumably at or near a top right now.

But then you see the direct contradiction in  the following charts and the whole setup suddenly doesn't make sense:


New highs on the cumulative NYAD are one of the best indicators available for assuming that an uptrend will continue.

The last chart above is an ema20 of the NYAD and shows that the daily NYAD data has been printing consistently above zero, as you would expect. It also shows a slight negative divergence but it doesn't appear to be anything to get too excited about.

So what to do? 

IMO a top is somewhere close but the next pullback is likely going to be a good deal shallower than I had been expecting it to be.


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