It feels like we are just about due for a surprise (i.e. breakdown). But people also thought the same thing of stocks in 1996 and 1998. I bought a few calls on individual stocks yesterday, but I am already kind of regretting it. It feels more like a gamble. The key is to have very good risk management for any long trade you are about to enter now. This is the kind of situation that can result in a fast and furious drop from which it could take a year to recover.
It would be wise to put this in the context of at least weekly charts and to do a little intermarket analysis. Note, for example, the Dow weekly Trans. There are also the reaction highs from two years ago to consider.
I'm with Chasinfla. Upward momentum on MACD dying. There comes a point when a pullback becomes a consolidation area for a further move down. Especially after three pushes up.
He seems to be saying that he's anticipating a bounce. Which is why I suggested a look at the weeklies.
It certainly is possible that we fail at this point and experience a correction of significance. However, many people have not done well this year by paying too much attention to secondary indicators like VIX and Put/Call etc. In fact, it was several months ago at lower levels that the bearish minded were pointing to bullish consensus numbers saying we simply could not go higher with so much bullishness. I think the point of the chart is that a bounce is possible, and we either bounce from here, or we begin the correction that so many bears are hoping for. Also, take a look at the link to a chart below of the US dollar, which is nearing a level of support at 90. Gold is right up against serious resistance in the 400 area, the Euro has had a good run, and probably needs a breather. The Dow did not collapse, even though the Nikkei fell nearly 1500 points (more than 10%) in about a month. Eco data is also showing signs of improvement. Seasonally, if that means anything, December is usually a good month. Politically, the market tends to rally into an election year. What will happen? Who the fuck knows? http://www.sharelynx.net/Charts/DX.gif