Lower highs and the ability of a market to hold a gap up are signs that a trend is weakening. Be aware of this as the 1st day of the month has been traditionally bullish as of late.
“Our research indicated that liquidations are vastly more important than initiations. If you initiate purely randomly you do surprisingly well with a good liquidation criterion.” ~Turtle Traders
Last week was the 1st in which the SPX failed to make a new high since November. Prior to this it had been 12 straight weeks of higher intraweek highs. In last night’s subscriber letter I took a look at other times similar streaks existed and what happened after they ended. Below is a study that showed results of instances with at least 10 consecutive higher highs.
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