So, This Is Exhaustion ~ The Risk Averse Alert

Monday, December 27, 2010

So, This Is Exhaustion

Continuing with possibility that, a rising wedge forming off late-June bottom is nearing completion...


At this point both relative strength (top panel) and momentum (bottom panel) support the likelihood that, several weeks more could elapse before top is reached. Via both these measures — granted, even now diverging from their respective, November peaks — some first-sign of threatening weakness to December's lift probably will register prior to the market advancing to its final peak.

No sign of this weakness yet. It is due, though, and should be more technically damaging than occurred during late-October's consolidation. This, of course, would confirm increasing weakness developing as a presumed rising wedge is thought completing, only further validating prospect that, the first leg of the market's anticipated collapse could soon follow.

More than the market's persistent (yet narrow) levitation over the past couple weeks, the remarkably weakening state of various underlying technical measures suggests the end of the market's levitation over the past fifteen months is near. Thus, what might be a rising wedge forming off late-June bottom prospectively appears all the more credible and ominous...

Fast Money
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