Markets – Macro – Technicals

Shrinkage

Nice rally. And we caught a sizable portion of it. In fact markets may just be back to repeating their familiar script. Off to new highs. After all they did so in 2014 after initial January weakness.

It has been a nice trade, but I scaled out. Why? Shrinkage. Not my own I’m happy to report, but the internals keep shrinking in this market and show a distinct difference to 2014:

1. Stocks above their 200MA are trending lower versus index price advances:

SPX 200AR

2. And likewise high/lows refuse to expand and are much lower than they were in February 2014:

US HL

Now that doesn’t mean this can’t change for the better, in fact we may indeed ramp right up to new highs, but more often than not shrinkage can have unforeseen consequences as perception is reality. Or is it?

Advertisements

Tagged as: , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

The material on this website is provided for informational purposes only, as of the date hereof, and is subject to change without notice and does not constitute investment advice.
Home | About | Disclaimer | Contact
Copyright © 2013-2017 NorthmanTrader
The materials on this website may not be suitable for all investors and are not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.