Stocks look ripe for a pullback

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I have been bullish on stocks and risk assets since the emotional knee-jerk reaction to the US election. It has been a good run but the hourly S&P 500 chart now looks ready for a pullback.

The chart looks like it has formed, or is in the process of forming a head and shoulders top. The measured target is relatively mild, down to 1400/05 but with the euro stuffed at 1.31 and commodity currencies overbought, the stars are aligned.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.


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  1. Do you see a pullback in Euro Stocks like the DAX?

  2. I have liked the DAX for awhile and I continue to think it will outperform the rest of europe but it’s up almost 10% in the past month, so a pullback on the DAX is an easy call.

  3. smells like bear trap to me; I’m long, so biased.

    talking about e/u. Guess we’ll see on next attack at 60.

  4. That’s what I tought when it breached 5000 points in 2006. I shorted and shorted – blew 20% off my acc with low leverage trades?

    Gl on shorting :D

  5. btw. – my timeframe being this session.

    otherwise, short aud, so I guess risk off in nowdays language

  6. Shorting stocks is very tough, people don’t realize how bearish you have to be to short. It costs money and it can blow up in your face. There are way better ways to express negativity on growth than shorting stocks. … anyway, looks like the declines have already started.

  7. Good call, Adam. I sold an e-mini at 1424. this initial move is going to retrace a bit though. 8 handles in 1 hr is a pretty strong move

  8. I had another short from 8000 on dax – got my 20% back and never touched the bastard again. Stocks are slowly retracing.


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