by Clif Droke, Gold Seek:
In recent commentaries we’ve looked at the possible scenario for an October stock market correction. This scenario is based on Kress cycle “echo” considerations as well as a number of technical and market psychology indicators which suggest a market top may be forming. A number of individual stocks are still bullish, but intermediate-term indicators suggest that distribution has been underway in various sectors and industry groups for some time. Accordingly, traders should remain wary of the possibility for an “October surprise.”
Another sign that the market may be undergoing distribution (i.e. internal selling) can be seen in our favorite index for measuring the broad market. A “3-point reversal” signal has shown up in the daily chart of the S&P 500 Index. This particular pattern occurs whenever the SPX makes three higher peaks in succession while the daily MACD indicator makes three lower peaks, thereby failing to confirm the new highs in the S&P.
Please follow SGT Report on Twitter & help share the message.