Last Updated : May 30, 2016 08:19 AM IST | Source: CNBC-TV18

US market feels fairly heavy, needs to break down: James Dalton

For the past 18 months there has been no indication of a new longer term money either on the buy or sell side, said James Dalton in an interview to CNBC-TV18.

Talking about the reasons for lackluster US markets, veteran trader James Dalton said maybe the market is heavy and needs to break down to find what is underneath the market before moving up.

For the past 18 months there has been no indication of a new longer term money either on the buy or sell side, said Dalton in an interview to CNBC-TV18's Anuj Singhal from the sidelines of Traders Carnival in Bangkok.

Dalton is a world renowned market profile expert and member of Chicago Board of Trade and Chicago Board Options Exchange. In his formative years, he was senior executive vice president of CBOE. He is also the author of two books - 'Mind over Markets' and 'Market Profile.'

Below is the verbatim transcript of James Dalton’s interview with Anuj Singhal on CNBC-TV18.

Q: What is your take on US markets and why we haven’t seen a blow out rally just yet?

A: It's been over a year since we have gone to a new high. Last year the S&P has crossed the 2,100 level over 55 times. We haven’t set a new high over a year. The last high on the market was like 2,105, so we died there again. What I see in the market for over 18 months, I haven’t seen any indication of new longer term money either on the buy side or the sell side. So, what I am seeing right now is a continual trading market locked in the where we have been for the past 18 to 19 months.

Q: Any chances of breakdown from this range or do you think when it does it will breakout and we will seek higher levels?

A: I would think that it is an equal chance that we break lower versus break higher. Sometimes, a market needs the break before it can rally; sometimes it needs to rally before it can break. This market feels fairly heavy to me and it feels like it needs to break to find out what is really underneath that market.  We need to scare out some of the weak money and find out if we get a break and is there a serious money waiting to buy.

Q: You get a sense that may be the market is due for some correction? Let say if there is enough money that comes in and takes the market higher would that be the right way to put it?

A: I never predict either a breakout or a breakdown. What I do is I take each segment of the market, one step at a time, so if we start to trade lower which we have broken we had a trend line that held for over seven weeks on a weekly bar. That has broken down, but now on back and forth to that trend line and so it is very uncertain at this point in time. So, I look to see, do the down days have more volume than the up days. Right now the down days are bringing in a little more sell activities then the buy days.

For complete interview, watch videos...
First Published on May 18, 2016 09:24 am
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