Another bubble popping? If not now when?
I want to go over this chart in some detail as the selling points and thinking were for the most part real time on too little sleep as usual. In other words this is a practical method. The market gapped to a higher open and after some consolidation began to move higher. Now I was expecting the gap open and because of the weakness I commented upon a few posts ago, I was prepared to find a top. The first bar that struck me was 10:00a.m. It is a reversal bar, narrow range but the same heavy volume as the previous wide bar. Supply is coming in. Then 4 bars with up-down pumping action, more evidence of supply. But we scurry to a new high. Probably a short covering rally and for all the fear, we are only 1% above the previous high. Now I was looking for evidence the demand from pained shorts had diminished. The 10:45 and 10:55 bars caught my eye. As if I had not thought my previous thought, I was musing how could we run out of demand here? I cannot believe it. Seeing how it just hung around no one else could either. Then I remembered the words of a legendary s and p trader, tops and bottoms are a lonely place. At 11:00 I pulled the trigger. The ease of movement down at 11 and 11:05 confirmed my opinion. Prices fell until noon and I noted the inability to rally until 1:00. The heavy volume at 1:00 showed large supply above the market. Perhaps all those longs hoping to sell to us little guys when it crossed 100. The rally to 99.64 was very weak, further confirming our deductions---no demand at the top of a rally. The wide range and ease of movement at 1:55 was duly appreciated. The move probably would not start until the last hour. Another weak rally climaxing at 3:00 at a lower high with minimal volume. It is the last hour and no demand is kicking in. This rally to 99.63 had no follow through. In the next 20 minutes down bars seem to have more volume than up bars. We are meandering. At 3:25 I noted to my colleague, "this is not healthy." His comment a few bars later as we had loaded up, "Finally supply." 
