Another positive week that S & P not 500 and NASDAQ 100 - I would call it positive on the DJI.
From one side that gives everything looks like a strong up trend, from other side it signs the last up movement to contradict. Like you, on the S and - P-500 can see (^ SPX) chart below, most of the technical indicators (CSR progress decreases, MACD, stochastics, and McClellan oscillator) are bullish. Similar picture could be seen 2000 charts on NASDAQ-100(^NDX) and Russell (^ RUT). The Dow Jones industrials (^ DJI) index has slightly different picture, where most indicators show that are neutral feeling (due to the trend page ways) with tendency to negative.
As you can see the technical analysis is very bullish. So, what would keep me, long way from trading. There are several reasons why I would prefer to stay in cash and wait:
1. Volatility is strong downward. Generally low volatility associated with bullish feeling. Decline in the volatility is still also known as a market squeeze is listed before strong movements. Some technical analysis compare current volatility level (VIX level) to the volatility in April 2010 (before strong correction in May 2010). Go further back in history, can display the VIX at similar levels in the middle of January 2010 (before the correction in the end of January 2010). The next similar low VIX readings could be seen in May 2008.
(2) The last up move was quite strong for this time (financial check S & P 500 index). Taking into account that there is no strong bearish volume surges at the lower end of November correction (don't panic sell were), is powered this up movement of large institutional traders.
3. I don't like the idea of the stimulus package offered by Bernanke. (Read my post "another stimulus package")
These are some of the things that keep me long from trading. I will not last long if I don't believe that big money play long and I play short because I see no short signal to play
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