Wednesday, May 20, 2009

CPC and The Breakout - Is a Top In?

Is a top in? Correlating the CPC, a few major indexes, the VIX and the SPXA50 (S&P stocks above their 50 ma) sure looks like we got a winner winner chicken dinner. BUT in this wacky manipulated market who the heck knows? Overly bullish CPC's have in the past been exceptional indicators of tops and bottoms as the chart clearly shows.

The Negative divergence as compared to market action is another indicator that the tide has turned. The chart also shows how the options market has acted irrationally (at least compared to trends indicated) here recently (black triangle showing bullish consolidation). This chart can be found in my chartbook on Stockcharts. There is a link to the left.

Notice on the indexes the wedge patterns nearing their end and the relationship of each to its 200ma. IMO the VIX needs to correct to its 200ma which is rising.

Note - I will update this chart periodically to save additional posts. I will add UPDATED to the title if i do.

GL today.


  1. Are you still targeting 930-950 for an interm top?

  2. I'm doubting it, but 936 to 955 is the range. The EWT guys seem to finally have a good grip on the count and if so they are hard to beat. Chance this pullback is strong, but not the "one". I'm not putting anything past this rigged market. Eventually it really tanks hard.

  3. If we have a lower low tomorrow and break and close below ~898 area on S&P....Bears will pile on Friday and the retracement will begin in earnest. Friday will most likely be a bloodbath. Two straight days where we ran up over 100+ on dow and yet closed red is ominous.... -Michael


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