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[Markets] Fragile

Authored by Sven Henrich via NorthmanTrader.com,

I’m probably one of the few remaining people left raising red flags, but hey, I see what I see and some of it I share and what I see is a fragile market that is setting up for pain. Now if you’ve been reading my public analysis you know about my Sell Zone, you also know about the weakness in charts beneath.

I’ll share another oldie, but goodie. Gaps.

Here’s one of the $SPX with open gaps:

Oh yes I’m a bit cheeky here, as it is the $SPX chart from January 2018 I outlined in my warning back then suggesting volatility will make a comeback and gaps would fill.

Well, they did and quickly so:

Or have we forgotten how quickly things can change? Chasing prices higher is not a guarantee of future results.

In any event, thought I’d share the current gap situation on a couple of charts.

Here’s $NDX just since June:

Here’s $SPX since the beginning of the year:

My apparently variant perspective: Many of these gaps, if not all, will eventually fill. And, as we saw in February 2018, gap fills can occur with a vengeance with little warning. Hence my view: This rally is fragile, handle with care.

*  *  *

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Published:7/13/2019 12:48:37 PM
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