Are the Markets Poised for a Collapse?

Stan Harley  |

Poised to Topple

The last few months have seen a complex, evolving top that has certainly defied my earlier attempts to talk it down. Yesterday saw the DJIA eclipse the 18,000 mile marker on the way to the rainbow that goes up into the sky forever. Or so they say. We also saw the Dow Utilities and S&P 500 ring the new high bell as well. But that’s about it. Not so the NASDAQ. Not so the New York Composite. Not so the XIV. And someone took out the biotechs today and ordered an assassination. Whether the final high for the Dow and S&P can be labeled as “complete” is yet to be confirmed. Of note, my hourly work ticked down in the final hour of trading today.

Last weekend, I showcased a pattern of 49.2 / 79.6 trading day cycles spanning the sequence of lows over the last couple of years. The next iteration is due now. But, you observe, we’re making a high here, Stan, not a low. An inversion perhaps? Ah, yes…

I can’t but help notice the action in the XIV Exchange Traded Fund (ETF). With the S&P 500 now at all-time highs, this ETF ticked lower on the day. And note the divergent structure of declining highs with each pulse higher in the S&P. My patience has been taxed to be sure, but I still believe a major high is on the cusp – this market is poised to topple.

 

Each month, Stan Harley publishes The Harley Market Letter, a newsletter that provides advanced technical analysis of stocks, bonds, and precious metals. This is the latest update to the Harley Market Letter for December. Want to learn more from acclaimed market analyst Stan Harley? Visit his site and subscribe to the full Harley Market Letter.   

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