Further rally in equities on Tuesday, here’s how things stand today:
1. Volume on the rally still weak:
8. Topping process analogs still valid, and likewise if we substitute in the current SP500:
In summary, looking under the hood, this rally still has the characteristics of a bull trap, as befitting the second chance. If so, a 5-day almost vertical rally, with superficial echoes of 2013, is the perfect bait to lure in as many as possible before the market tumbles in earnest. Yes it feels bullish again, but stepping back I remind you that things indeed changed since 2013, that we have a fairly comprehensive cyclical bull topping checklist, that we have a set up for a stock market crash, and that there was a multi-angled case for a turn-of-the-year major market peak that remains in play. I have added to short stock index positions again this morning and I am out the rest of the day.