Weekly Observations: 'Sell in May' looks like a good Strategy this year.....

The following graphs should underline our theme of the topping formation Mr. Market is in, which seems to jive nicely with the old 'SELL IN MAY' adage.

We believe that there is a good chance that the stock market will correct some time, the dollar will be strong und Gold will move opposite to the stock market.

Quick Thoughts for this weekend

1) Gold is bottoming in Dollars and in Euros

 2) The Rolling Top in the risk Trade is continuing, with the Dollar already strengthening. The EURUSD could NOT hold 1.35 which we wondered last week

Don't get blinded by the Noise !

Exhaustion Watch

Conclusions:

• Energy & Materials look bearish
• Banks & Russel 2000 look prone for a turn
• China Bears & Gold has already gained bullish ground with their Weekly bull. Pivots
• Tech has already lost bullish ground with their Weekly bear Pivots (bull pivot in the Tech Bear ETF)
• 20yr TSY & Corp. Bonds look bullish

The Retesting Phase

This is a follow up post to our ANATOMY of a TOP post on Jan23:

Exhaustion Watch: BEARISH FLIP......

....we need more confirmation, but it looks like to have started.

ANANOMY of a TOP

Below you can beatifully observe the sequential nature of a Top. A Top needs to mature, it takes time to fully develop. It took over a month to have all characteristics in place.

As Tom DeMark said on Bloomberg this week, this could be sth. meaningful.

Exhaustion Watch: Bear Alerts en masse

The Trends get more and more tired by the day with ample of divergences, sell signals, overextended cycles etc.

Exhaustion & Hedgefund Watch

The Hedgies have started to tip their toes into the bear waters...

...while taking some profits off the table...

Our Exhaustion Watch reiterates that we are...

Oversold and tired after the promised SANTA rally... we promised you....

Exhaustion Watch: the correction that doesn't want to happen...!

Fact is that the Market is ripe and overdue for a break. Fact is also that Ben and the POMO crew is fighting the hack against this.

We believe in gravity here. The more you stretch the rubberband the harder the reaction....stay tuned and watch.

Exhaustion Watch:...the dugs are aligning !!

Convergence of Indicators leads to very powerful set ups which you do NOT want to ignore.

Exhaustion Watch: Countertrend Rally!

Against the backdrop of the Exhaustion Watch and the MOMO & FLOW picture and the broad Sentiment , but also taking into account a more mixed micro Sentiment look, I would broadly think that the correction has started, experienced some countermove in the OPEX ( ...remember this used to be Hank Paulson's speciality given that they needed good weather for GM!!!) and still has nor finished yet.

Exhaustion Watch: What a fireworks .....

the sheer sum of Divergences (I try to mark them in black) in all differnt categories, ActB, MACD plus Candle signals plus exhaustion (as primary filter for the list) and even a VIC2 (fake breakout) signal....

Something has happend here.....

Exhaustion Watch

A very advanced, exposed market....

Look at all the extremes above, the correlations all at 90% ......

Exhaustion Watch

The bull has run for quite some time and we have reached some solid exhaustion levels.

Exhaustion Watch

Exhaustion Watch & Option Flows

The Institutional Holdings portfolio seemed to have peaked when you look at it from the actual positions market participants have taken in the Options market.

Our exhaustion watch aslo highlights the group of Tickers that seem ripe for a change. The group is relatively large. We only looked at Tickers with some kind of extreme readings and there are a lot.
Bottom line:

Mr. Market needs a break from the bullishness and it will at least be a correction.....

SUSI WEEKLY UPDATE & Exhaustion Watch

Susi paints an across the board bullish picture !

ExhaustionWatch confirms SUSI, but shows a good degree of exhaustion....

The Trend is your friend until it ends and as of now we are on bullish. It looks tired and we have a fair of amount of evidence (Gartleys, FibTime, Oversold/bought readings etc. ) hinting at a flip, but Mr. Market has to call the shots.

Monday/Tuesday should give us a good indication.

Exhaustion Watch: OVERBOUGHT

Exhaustion Watch and SUSI WEEKLY UPDATE

Susi has called the bounce but provides no further info from here.

The exhaustion watch:

SPYDER Flow analysis: "an unhealthy market"

GOLD Flow analysis: "a healthy market"

Bottom line:

next week offers:

1. FibTime Cluster in the SPYDER and the TLT
2. Overbought market
3. unhealthy market with a lot's of 90% days (google that if you like) and weak flow
4. a Gold market that will either exhaust of explode upwards

Exhaustion Watch

Panik has brought us some extreme Oversold Momentum readings that could let the market pause for some days.

The overall picture is short and medium term bearish and long term mixed.