Traders are conditioned to buy the dips, crying oversold at every red candle. But the dip buyers temporary profits are beginning to slip into overhead supply.
To understand why there is so much uncertainty in the direction of markets right now we can turn to point and figure charts.
Will the Bulls vigor trap Bears yet again? I'm not sure but eventually these big sell signals will hold and when they do they will matter in a big way.
Besides the technicals, there are other headwinds to a rally. A major headwind is the current strength of the USD.
We can see that the etf which follows coffee futures, JO has just flashed a huge Buy signal after it has broken out of a major downtrend.
Can the Bears finally sink their claws into this Teflon Bull Market? Only time will tell...