Down on the day on heavy volume. Down on the week, the month and the year. Is there a message here?
I'm treating today the same way IBD would call a bottom. First you have strong move up and then within 3-5 days, or so, you have a rally of close to 2% to confirm the up move. Obviously, I'm looking at the inverse of this with today's 2% decline confirming the large moves from late last week and Monday. To me this is saying that traders should expect lower lows from here as we are witnessing a change in trend.
The bearish rising wedge on the $SPX daily chart is confirmed with three closes below the lower line. This sets up a measured move of 120pts which takes $SPX back down to the 1740 area. This will also bust $SPX down and out of the rising price channel on this chart, which is anchored on the lows from November of 2012. And this is likely only the beginning of what I believe is going to be a major correction. The last time we had any type of major correction was back in May of 2011. That correction lasted 5 months. I believe we are going to see something similar and perhaps worse.
In the short term, the $TRIN closed at 2.18 so is oversold. $NYUPV closed at 83 and is also oversold. There are a couple of other breadth indicators that also moved into oversold territory today so don't be surprised if we bounce or maybe just pause for a day or more before the next leg down begins.
Be careful & GL
I'm treating today the same way IBD would call a bottom. First you have strong move up and then within 3-5 days, or so, you have a rally of close to 2% to confirm the up move. Obviously, I'm looking at the inverse of this with today's 2% decline confirming the large moves from late last week and Monday. To me this is saying that traders should expect lower lows from here as we are witnessing a change in trend.
The bearish rising wedge on the $SPX daily chart is confirmed with three closes below the lower line. This sets up a measured move of 120pts which takes $SPX back down to the 1740 area. This will also bust $SPX down and out of the rising price channel on this chart, which is anchored on the lows from November of 2012. And this is likely only the beginning of what I believe is going to be a major correction. The last time we had any type of major correction was back in May of 2011. That correction lasted 5 months. I believe we are going to see something similar and perhaps worse.
In the short term, the $TRIN closed at 2.18 so is oversold. $NYUPV closed at 83 and is also oversold. There are a couple of other breadth indicators that also moved into oversold territory today so don't be surprised if we bounce or maybe just pause for a day or more before the next leg down begins.
Be careful & GL
