The attached chart highlight shows the last 20 trading hours of New York session trading in the SP 500. To me it is not a healthy chart because it is out of balance. There are eighteen green candles and only two tiny red candles. Essentially, we would rather see some yin and yang, some to and fro. This one has too much one-sided emotional buying resulting in the preponderance of green candles.
When we stack this on the daily chart, which has seen thirty green candles and only 5 red candles out of the last thirty-five daily candles, this market is getting too one sided and frothy. Hence while I have been bullish for the last 6 weeks up till today, I think it is time to dramatically temper that view. While the above observations do not translate to an outright sell signal, they are a loud and clear warning that this pace can’t be sustained. Whether it is Wednesday or a subsequent day, a rug pull is highly likely to occur in the near future.