Record buying climaxes last week

Got this from investors intelligence. check it out

Two weeks ago we published the above chart from Investors Intelligence showing the number of weekly buying and selling climaxes, one of the many valuable indicators they tally. The week ending April 16 saw 467 weekly buying climaxes, which, as we noted then, ranked in II’s top 10 highest readings in their 20+ year data base. It turns out that this extreme was just an appetizer, because last week II reports that there were 1,079 buying climaxes, by far an all-time record. This was the exact opposite reading to that which occurred in March 2009, at the Primary wave 1 (circle) low, when there were 1,010 selling climaxes. A buying climax occurs when a stock makes a new 52-week high and then closes the week lower. A selling climax is the opposite. Climax extremes are thought to represent distribution, from either strong hands to weak (buying climaxes), or weak hands to strong (selling climaxes). A high number of climaxes tend to congregate around market turning points. Whenever any indicator moves to a 20+ year record, one should take notice. This chart strongly suggests that the stock market’s upside potential is limited, even if the major indexes manage to eke out a push above their respective highs of last Thursday-Friday. In our opinion, last week’s upside extreme is a perfect bookend to the March 2009 downside extreme. We think the stock market is transitioning from “up” to “down.”