Here’s an updated chart ( through 4/3) showing the correlation of the 10 day exponential moving average of $Tick compared to SPX.  Please see our previous post about this.  There still appears to be a correlation and a possible top.  We never give investment advice on the Swampreport, but it is interesting that the Pragmatic Capitalist’s “Ultimate Indicator” is also showing a possible top.

tick-as-of-apr-3

In a Seeking Alpha post on March 19, Great Trades described how the Tick 10 day exponential moving average was, of late, serving to warn of market pullbacks:

The below chart of the Tick 10-day EMA readings shows that extremely high positive readings have previously preceded sharp selloffs:

The current level of the Tick 10-day EMA is extremely high, increasing the likelihood of a strong pullback very soon.

We have tried to update this chart through today’s (March 24) trading, below.

tick-as-of-mar242

As can be seen, the salient feature of the updated chart is that the Tick 10-day EMA is still very high – indicating a possible retreat from the recent 7% gain.  However, technicals like these are just that – technicals. With the government likely involved in a variety of manipulative actions, some overt, some clandestine, technicals can break down even more than normal…