This week's Ponzo forecasts have finally diverged from our 2 month bullish momentum trend and now have SPY showing weakness and TLT showing strength. Note that current long term price target is 237....whereas 2 months ago it was 236.....and here we are only a couple points from either target.
Despite the market enthusiasm for a Trump tax relief package (financials blew the doors off today including our focus stock GS), the bottom line is that any realized relief is not going to happen in the short term...and although the market tends to look out 6 months ahead in its pricing the technical reality is that we are grossly overbought.
TLT, on the other hand ,which has suffered a daily barrage of selling news, appears to be poised to hold it own longer term and to actually reflect some positive momentum.
Today's wild divergence between VIX and its ETF proxy VXX should throw up a giant danger signal and the dwindling daily volume in SPY and the NYSE in general should be a further cause for concern for the bulls.