"Captain, the men are beginning to grumble"

12 Kas 2014

Using the symbol S5TH (SP-500 components ABOVE the 20 period moving average) I found something interesting on the 30 minute interval. Since Sept.4 where the SPY (SP-500 ETF * top half of the chart) was pretty much near its peak, through the precipitous drop (I heard a funny metaphor for that - the market had a "Wile .E. Coyote" moment - LOL) and now, back to yesterdays closing highs (Nov.11) on the SPY - we are NOT getting confirmation from is own components. In the sub-chart below is the S5TH indicator. I simply drew a price percent change line from the Sept.4 opening price to yesterdays (Nov.11) CLOSE. Here's the final score :
SPY +1.66%
S5TH -10.9%

Am i calling for a crash? - of course not, but certainly a much needed (and probably expected) profit taking pull back to digest these insane gains we have experienced the past 29 days - talk about a parabolic move !
When I trade, I always ask myself "is the risk greater RIGHT NOW of going long or short the market"?
My definitive answer right now is the risk is MUCH greater going long at these levels than short. How about a compromise then - if not a profit taking sell off then the other question is "do I think there is a risk of MISSING OUT on any near term up side move"? Again my emphatic answer "NOPE" - This quick and dirty analysis (I use many others btw) would have me either SHORT the market or at the very least go to cash or hedge out my exposure (I'm a full time options trader)

In closing - I'm "synthetically" SHORT this market and have been since last Friday and feeling comfortable with my decision looking at this mornings futures

PS - I LOVE the 30 minute interval. There are 13-30 minute intervals in a trading day - 13 is a Fibonacci ratio !

Enjoy (I hope!)