There is enough technical evidence that the equity markets are overstretched and due for a correction.
As mentioned last week the trading volume was relatively low.
Friday it increased a little and we saw a trading volume on the ES (JUN) of just over 1 million contracts.
The sentiment is still strong.
We took profit on the long positions, but the buy signal is not yet cancelled.
In the past we have seen that even when the financial markets are due a correction that it can take a few weeks before it hits the wires.
A frustration that you need to cope with being a trader based on technical models.
All that can be said is that we had some very nice profits which we cashed out on and now wait on the side-lines.
The trend is your best friend and if the markets are continuing to move higher then we get a better entry level to go short.
We did say that it can take until mid-APR before the equity markets will top and show a reversal.
Let us see what the week will bring.
The S&P gives a sell signal and the green light for a short entry below: 4079.
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