The S&P has reached the far end of my 1173-1181 resistance level I've been citing here for weeks. The evidence strongly supports a major top forming at any minute. I wouldn't be caught long here for the life of me. But patience is a virtue here.
Above is the Nasdaq ending diagonal formation I mentioned yesterday. The Nasdaq appears to be finishing up an ending diagonal for Subminuette wave v. Today's gap up and "throwover" is typical of the last final move in an ending diagonal and if correct, it assures us that a sharp and deep move lower is coming very soon. A move back underneath the upper trendline of the ending diagonal would confirm that the diagonal is over and the market is moving sharply lower.
Boy, talk about extreme. The VIX still can't get above that lower bollinger band, and after the monster rally and surging sentiment through the roof, the VIX has now fallen off a cliff and has issued the second setup for a stock market sell signal within a two month period. The complacency and overoptimism that it's "risk on", "the Fed won't let us lose money on stocks," and "I can only win if I buy stocks, there's no losing here so buy buy buy" is showing up across the board here. The market feels like a big bubble waiting to get popped (those of you who loved the movie "Scarface" will appreciate the parallel of that comment to a famous line in the movie).
The market is VERY near a top. The euro has so far failed to make a new high against the dollar and the british pound has been flat, still far from a new high. Even though this may change soon with new highs, it doesn't negate the evidence at hand. The feeling that the market can only go up up up is exactly the time when I want to be positioned for it to go down down down.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.