Hey Guys,
Alright, so here's the deal.
In its history, the S&P and other indexes have experienced a high amount of auto-correlation - or 'trendiness' - which used to make trading very easy. The thinking used to go like this: "If the day before was positive, it was a decent bet that today would be positive as well."
This all changed in the later 2000's with the rise of High Frequency Trading. H.F.T. destroyed the indexes' auto-correlation, which made trading much harder.
This unprecedented auto-correlation, marked on the chart, makes me think that this rally is mostly human-fueled. To quote Warren Buffett, the greatest investor of all time, "Sell when everyone is greedy."
Together, I will list the confluences here that make me believe that SPX is a sell:
1. Technically overbought
3. Changing Net Sentiment
5. Overall Greediness
Given these factors, I believe that now is OFFICIALLY the time to sell.
I have marked a zone of support for SPX where it might consolidate towards. I will be entering the markets when they open in a short position.
Trade Well.
AW
Alright, so here's the deal.
In its history, the S&P and other indexes have experienced a high amount of auto-correlation - or 'trendiness' - which used to make trading very easy. The thinking used to go like this: "If the day before was positive, it was a decent bet that today would be positive as well."
This all changed in the later 2000's with the rise of High Frequency Trading. H.F.T. destroyed the indexes' auto-correlation, which made trading much harder.
This unprecedented auto-correlation, marked on the chart, makes me think that this rally is mostly human-fueled. To quote Warren Buffett, the greatest investor of all time, "Sell when everyone is greedy."
Together, I will list the confluences here that make me believe that SPX is a sell:
1. Technically overbought
- RSI
- Bollinger Bands
3. Changing Net Sentiment
- Put/Call Ratio
- Popular Analyst Chatter
5. Overall Greediness
Given these factors, I believe that now is OFFICIALLY the time to sell.
I have marked a zone of support for SPX where it might consolidate towards. I will be entering the markets when they open in a short position.
Trade Well.
AW
