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Market Set To Head Lower

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May 08, 2012 – Comments (0) | RELATED TICKERS: SPXL , SPXS , DIA

May 8, 2012  includes: BGU, BGZ, DIA Nice article I found today.  There is an unsettling resemblance between the chart pattern for April 29, 2011 and March 16, 2012. It indicates that the market is headed lower.

As you can see on April 29, 2011, the Dow reached its high for the year to the accompaniment of heavy aggregate volume and extremely large blocks which were Insiders distributing and selling short to the unsuspecting hapless public.

The block activity on April 29, 2012 in Figure 2 is a subset of the overall mass of data we collected, organized and evaluated. Once again these are extremely large blocks in a number of issues which mark the terminal phase of the rally. The subsequent decline of 2000 points in the Dow came as no surprise. Whenever you witness transactions this large you can make two assumptions:

First - it is a market heavyweight establishing a very important merchandising stance; and

Second - extraordinary price consequences must follow.

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