Things Unfolding Quickly

An abrupt, short-term reversal

Friday's action, a large range day into overbought territory on a short-term basis, on a volume bar, sets the stage for a pull back to the downside next week. Yes I know this is very abrupt but I'm just responding to what the indicators are showing.

Therefore, Tuesday I looking to sell out of long positions reversing and going short, for what, at this time, looks like a short-term trade. Ideally, this can be executed on strength Tuesday.

Yes I still expect a strong Summer rally as a prelude to a major major sell-off beginning later this year. Further, we are looking for a very reliable long-term cycle bottom in December, an extremely reliable bottom on a statistical basis. For these things to manifest tells me there's going to be an incredible sell-off coming in the fourth quarter, starting at the end of this Summer rally. But right now we have a short term sell based on the “Volume Tunnel” System I have, among my favourite and most reliable short-term systems.

For more on the Volume Tunnel System, which I'll be writing about later this year, as well as a detailed explanation of volume bars, which are the modern-day version of the old-fashioned art of tape reading, see Market Systems, Indicators, and Filters.

More as conditions warrant.