Support the Wall Street Examiner! Choose your level of support to receive a free proprietary report as my thanks. Click the button below to see your options. Become a Patron!

Here’s Why This Rally is Dangerously Fragile

This is a syndicated repost courtesy of NorthmanTrader. To view original, click here. Reposted with permission.

I’m probably one of the few remaining people left raising red flags, but hey, I see what I see and some of it I share and what I see is a fragile market that is setting up for pain. Now if you’ve been reading my public analysis you know about my Sell Zone, you also know about the weakness in charts beneath.

Liquidity moves markets!

Follow the money. Find the profits! 

I’ll share another oldie, but goodie. Gaps.

Here’s one of the $SPX with open gaps:

Oh yes I’m a bit cheeky here, as it is the $SPX chart from January 2018 I outlined in my warning back then suggesting volatility will make a comeback and gaps would fill.

Well, they did and quickly so:

Or have we forgotten how quickly things can change? Chasing prices higher is not a guarantee of future results.

In any event, thought I’d share the current gap situation on a couple of charts.

Here’s $NDX just since June:

Here’s $SPX since the beginning of the year:

My apparently variant perspective: Many of these gaps, if not all, will eventually fill. And, as we saw in February 2018, gap fills can occur with a vengeance with little warning. Hence my view: This rally is fragile, handle with care.

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

Try Lee Adler's Technical Trader risk free for 90 days! Follow the money. Find the profits!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.