A Case Extending Levitation ~ The Risk Averse Alert

Thursday, November 11, 2010

A Case Extending Levitation

What a wonder has been the market's [forecast] levitation. Similarities among various technical measures to conditions at April peak abound. And still, there is reason to believe levitation might persist, as nothing signaling technical breakdown challenging this can be found.


Of course, the situation could change in an instant. A decisive break could come as soon as tomorrow. Yet everywhere is indication top possibly has not been reached.

Lurking, too, is the fact that, at April top relative strength maintained a position of extreme buy-side strength for an extended duration lasting several weeks. Last Thursday's surge brought but the first extreme RSI peak registered during the market's advance off late-August bottom. So, levitation might continue for some days longer.

OEX 5-min

If at first you don't succeed, try, try again. My eyes once again are open to the possibility that, a "rising wedge" might be unfolding and forming wave 5 of c.

Contrarily, waves i, ii and iii of 5 already might be formed, with wave iv of 5 unfolding presently and wave v of 5 ahead.

Or, wave 4 of c ended last Wednesday (11/3), and wave 5 of c Friday morning, suggesting a breakdown confirming this possibility is imminent.

Given how the market's levitation has persisted thus far, prudence awaits a clear signal bolstering the possibility its end has come, however.

Fast Money
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