Once again equity indices have become stuck near important inflection points, which incidentally in my book are key thresholds from which shifts in momentum and trend changes can be triggered.
No matter if you are bullish or bearish – this will most likely be the most important update of Q1 2019. So it’s once again time to forget about the daily noise, take a few steps back, and look at the market from a 10,000 foot perspective.
There has been no rest for the weary since we embarked into a new market phase back on January 26th of last year. In fact if you look at the tape ahead of that date and what followed then you probably agree that the contrast could not be more stark. On the left we see a low volatility bull market while on the right we have a high volatility bear or sideways market.
This was supposed to be a routine update on the current advance in equities but one chart quickly changed my perspective. Plus Gartman suddenly went bullish, which triggered alarm signals all over the place down here at the evil lair. Okay, I’m kidding about Gartman but I’m serious about seeing trouble on the horizon for the bulls:
Equities continue to fade retail sentiment which is evidenced by participation patterns that appears to be dominated by institutional buying. Yesterday’s session once again managed to take off and churn higher without touching VWAP even once after the first hour. Which by the way is exactly what happened on Friday as well. I have chosen to not over think the situation and simply trail the tape higher – at a respectful distance that is.