US Equity Markets Have Seen Their Highs…

March 20, 2018

Diamond formation broke down yesterday. Only positive sign from a technical perspective is that the break down was on relatively low volume

This needs to be seen in context of the longer-term patterns to which i have drawn attention over the past few months. I am convinced that the US equity market has peaked

If volume rises tomorrow (selling "pressure" emerges) this break might be seen by history as the day that the Primary Bull Market ended.

Whether a Primary Bear Market emerges will depend on classical Dow Theory: Both the DJIA and the Transports must fall to lower levels than previous lows on rising volume.

The critical levels are:

DJIA: 24,200

Transports:10,146

Although the Transports are also reflecting a Diamond formation, there was no sell signal today. Nevertheless, oscillators are neutral to negative and short term MA is pointing down and index remains below the blue MA line. 

Note the downside gap on the Nasdaq, which broke down from a rising wedge a few days ago.

The S&P500 ALSO broke down from a Diamond Formation today

Conclusion

No doubt in my mind that the US equity markets have seen their highs

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Brian Bloom

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