The most important futures chart in the World right now is the Nikkei 225

The most important futures chart in the World right now is the Nikkei 225 By Scott Pluschau Posted: 16 May 2013 04:54 AM PDT The Nikkei 225 is going on a parabolic move on the Daily chart in which the rally is so intense it appears to be going up now at a 90 degree angle. It reminds me of the "Dot Com" days, and some of the charts I saw that imploded and/or cratered not much longer after this. One recent example is the chart in Silver back in 2011 when it was approaching $50 it was going at a nearly 90 degree angle.  Left hand side on the chart below is the Silver Daily chart in 2010-2011; right hand side is the Current Nikkei 225.   Pricing Patterns, Volume, Phase of Development, are similar because the underlying contract trades in an "auction".  The theories/principles of Auction Market's apply to all futures contracts in all time frames. (Click on chart to expand) What is important here is the S&P 500 seems to be following the Nikkei 225's lead with relentless demand, demand I believe is rampant speculators with Algo's.  But besides that fact there is relative weakness in just about every risk asset compared to the S&P 500.  I believe the entire financial universe is at the mercy of the "risk off" environment when it comes in the S&P 500.  I believe the S&P 500 is ripe for a 5-20% correction, for various reasons and what I feel are valid reasons.   Will you be prepared or ready to find the "Diamonds in the Rough" at that time? Picking Tops is a deadly ego game, but if I was forced to pick one, and don't hold me to it, it is 1671 in the S&P 500 which is the "measured rule" of the most recent "bull flag" pattern on the 30 min chart.  Notice on the left hand side where the first flag appeared, it coincided with the Breakout above 1600 on the Daily chart, right hand side chart.  Flag patterns are continuation patterns.  The first flag had its "measured rule" target fulfilled.  The most recent flag puts the target at 1671 using measured rule, which is taking the distance from the top of the flag pole/mast to the bottom of the flag pole/mast and adding it onto the breakout point.  Demand can shut off when the pattern is fullfilled as the losing side of the contract gets flushed out.  In regards to flags and measured rule, the saying is the flag flies at half mast.  I have seen three flags in a row before, so one more is certainly possible, but at that point I would say the term "over extended" or "over bought" would apply. (Click on chart to expand) Twitter/Stocktwits/Linked In @ ScottPluschau