SPX appears to be breaking its trading channel trendline for its most recent rally. However, it may remain stalled above its Orthodox Broadening Top trendline at 1838.00. Until that trendline is broken, there is still a chance that SPX may attempt yet another probe higher. There may not be a potential sell signal, even an aggressive one, until that trendline is broken.

Trading volume is very light, so there appears to be no great rush for the exits prior to year-end. That could change on a moment’s notice, since equities are very extended and the cycles are very stretched.

Today is a pivot day for both SPX and VIX. If the trendline remains unbroken, the next pivot day happens to fall on Friday. So, this week could be dull and uneventful, or just the opposite, depending on today’s action.

The good news, however, is that VIX is now approaching its 50-day moving average at 13.51. Once above that level, the VIX may be giving us an aggressive buy signal and an aggressive sell signal for SPX.

Other good news…the NYSE Hi-Lo index is now beneath all of its potential supports, giving an aggressive sell signal. This sell signal may be confirmed when the Hi-Lo index breaks down beneath its prior low at -73.00.

In summary, the Hi-Lo index is the only indicator giving a probable aggressive sell signal. The other indexes are not, but need to be watched.

I believe the break may be rather sudden, so let’s stay watchful over the next few days.

Regards,

Tony

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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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