$TRIN closed at 2.51 today and normally this indicates an extreme amount of selling and this will be difficult to duplicate going into a Friday. The on the $VIX 60min chart closed just shy of 70 so I would expect some follow through selling early tomorrow to push the $VIX to or above 70 and then either the market will stall there or push higher throughout the day. Of course, geopolitical events are likely to trump all of this so if there is more bad news out of Russia/Ukraine, then all bets are off.
Regardless of what happens on Friday and perhaps as a result of disconcerting events in the Ukraine, I do expect $SPX to visit the 50% retrace level and perhaps the lower on this chart at about 1800 before the decline ends. However, the market is likely to have a plan of its own as it is always out to make fools of those who attempt to divine its movements.
Be careful & GL
I found it interesting that the VIX did not move into the frothy zone. The Ukraine situation may have kept investors a bit on edge. The same applies to the AAII investor sentiment which has been only slightly above neutral, probably for the same reason. RSI did confirm a near-term top. SPX distance from 200 DMA also flashed caution, but not as much as recent rally tops.
I expect if this correction continues at this pace or accelerates, it will burn out prematurely. I'll be looking for the MACD to form a positive crossover in 2-3 weeks signalling the pending reversal. I felt I was most prepared for this correction from using a comprehensive set of technical indicators. A very useful craft.
Cheers - Glenn
I think what we're going to see here for a while is a series of lower highs followed by lower lows until there is a climax sell signal from the above and several other breadth indicators that I follow and that you can find on my blog under 'Breadth Indicators.'
Since the $VIX 5EMA did not move into the froth zone, I am wondering what's going to happen when it gets up near 19, the turning point for quite some time. If that EMA doesn't stop there, then we're in trouble. I am also watching for a red candle on the March monthly chart as this would confirm for me that what we're looking at is going to be more than the usual pull back.