Stock Market Analysis

Friday, November 10, 2017

US Market Teethering, Shaking...

Since my last report to paid subscribers describing the dangerous signals and behaviors that I spotted in the US market, the market took a dangerous dive yesterday. Even though the market did manage to recover most of its lost grounds, it did close negative, forming a very dangerous signal.

That very dangerous signal is that hammer candle that was formed yesterday.

Wait, didn't I say before that such candles are usually very strong bullish reversal signals?

Well, I also stated the context within which it is a bullish signal. However, there is also a context within which it is a very strong bearish reversal signal. Yes, this is why technical analysis, especially candlesticks, continue to baffle beginners so much. The problem is that CONTEXT is everything in technical analysis. The very same candlestick or the very same formation can mean VERY different things, in fact, completely opposite things under a different context. Context being the state of the economic cycle and the market cycle.

When such a signal occur around new highs in deep overbought condition, it is actually a bearish signal and one which can lead to a very nasty intermediate correction. On top of that, the fact that options traders pushed total equities put call ratio into the put options zone rather than keeping it in the call options zone like they always do in strong bull trends also seems to confirm my suspicion.

All of these along with all the signs that I have spotted along the week prompted me and my Master's Stock Options Picks Subscribers to take profit on all of our existing call options positions (which are all profitable so far) and go away today ahead of a very dangerous looking weekend.

Have you been profitable over the past couple of weeks? If you hadn't you might wish to consider joining me for just $1.

For now, the market remains in all out bull trend.

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