My sentiment toward the market is shifting to the bearish side after a 13% run higher over the past month. And here’s why…
There were 704 stocks making 20-day breakouts on Monday. Today, that number is just 290.
I also warned yesterday that only 57 stocks were making 50-day highs vs. 704 at 20-day breakouts. This generally means the market is stretched like a rubber band, and that rubber band is going to snap back.
A true trend generally takes two months — or 50 trading days — to form.
So when it’s just a 20-day high, that means we’re overbought, whereas a 50-day high is much more likely to mean a change in trend.
Simply put, the 20-day high is a rubber band indicator while the 50-day is a trend indicator.
When I learned this, it changed my life as a trader.
Now, with that important lesson out of the way, I don’t expect big institutional moves ahead of FOMC Wednesday…
I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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P.S. This Signal’s Been Right 19 Times In A Row — and Just Flashed Again Before Fed Day
A pattern so reliable it defies statistical probability (19 consecutive correct signals) just flashed before tomorrow’s Fed announcement.
Two specific stocks are showing the exact setup that historically surges after this signal appears.
