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The Market Signals Caution


Longs may get trapped before the holiday weekend.

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NDX (Nasdaq 100) tags 4079.45, just shy of the August 2000 high of 4080.49, which is also lining up with weekly R1 for NQ (Nasdaq 100 futures). We are also seeing a negative divergence creeping in with the S&P 500 (SPX) stronger than the NDX.  Contrary to what I am reading just about everywhere from the general media to the financial press, I don't think we are safe up here. Game tactics suggest trapping a lot of folks thinking long into the Labor day weekend after a monster rally, so I am waving a red flag up here. It would have been preferable to attack this holiday from a weaker standpoint.

Incidentally, as I pointed out a few days ago, today marks the anniversary of the August 1987 all time high, which was only regained two years later.
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