Here's an updated chart of the 5 and 10 day moving averages of the CPCE (updated from my post on 25 June) which may be giving us a warning of a possible turn down in the market:
CPCE Daily Chart:
You can see that we are in the area of that blue dashed line which marked a number of important highs in the market during the 2007 to 2009 decline (see the chart from 25 June).
Its obvious from the chart that the moving averages can drop further before a market top is formed, but with the 5 ma ticking up, its a warning that a market top may be forming near current levels.
We need to see the 10ma tick up, however, and the 5 ma cross back above it. This has usually been a good signal of some sort of market top in the past. Its not 100% perfect, but what is.
For the moment, it should be taken as a warning to at least tighten stops on long positions.
