On 22 July we had a potential signal from the 5 and 10 moving averages of the CPCE that a market high might be near. However, it came with two warnings that the market could continue higher despite this signal. Both warnings played out and the markets did continue up, while those moving average of the CPCE continued to drop.
Yesterday, however, we saw both tick up, with the 5 ma possibly forming a double bottom. The 5 ma has not yet moved above the 10ma, so there's no real signal yet. Here's an updated chart:
CPCE Daily:
Still, its worth keeping an eye on this. If we have a top in on this rally from the July low, as one of my counts suggests, we should see these moving averages confirm it by the 5ma crossing above the 10 ma and both bursting up through the blue dotted line. If we have further upside to come, they will likely stay below the blue dotted line as they did in the area highlighted in green, while the market continues its climb higher.
For the moment, then, they are just saying that we should be alert to the possibility of a top, even though its not yet a confirmed sell signal.
