1. ONLY firms like Goldman gets to short at the top, all others get squeezed 2. The short interest (percent of shares in float that have been sold short) on the Spiders (SPY) is currently around 40%. 3. The hedge funds/quant funds that are long are playing a game, and it's called: "Drink, Puke & Cover". In this game, the key is to get as many short sellers to drink as many bottles of Pepto Bismol, puke, and finally push the buy button to close out their short positions 4. The RSI on the weekly chart of the SPX has NOT been in the mid-60's since the summer of 2007, and the RSI today is again in the mid-60's. We all know where the market was in the summer of 2007. 5. The 200 day weekly moving average on the S&P is around 1,240-1,250 range. The SPX is having trouble breaking and holding above 1,150. IF it gets breached, then look for a topping sign around the 200 day weekly moving average on a chart 6. The market WILL FAIL, because stocks fail, and if you've been trading long enough, then you'll know this to be a fact...THERE'S ALWAYS A SUCKER AT THE TOP! Until then, wait for the signs, probably a news driven event, and a selloff in the futures, and a huge opening gap down....then you'll have seen the top.
i'm a bear but i want to see one big push up to extreme overbought conditions as a reverse capitulation.
The markets are at extreme overbought conditions with the RSI showing 95+ on nearly all indexes. I'm sure it can push higher without a problem, the fed is supporting all aspects of the market and a sell off is met with plenty of upside.
This was the basis for the trade. This chart is from a month ago that I posted in elovemer's channel thread. It was something I was watching. Figured i'd give it a shot if a trade came up and it did. Low reliability and that's what it turned out to be.