SPX made a sideways consolidation and closed beneath the Head & Shoulders neckline today. It may pop briefly above it in the morning, but this is a good sign that the decline is gathering momentum to the downside.

Despite the late day VIX dump, it still closed above mid-Cycle support at 14.41. There is no loss of the sell signal with VIX. In fact, I had some concern that today we might see VIX making a lower Intermediate Wave (2). VIX shows surprising strength in this regard.

NDX leads the decline for the stock indexes. It also had a sideways consolidation after the big push don at the open. Iy may reach for Cycle Bottom resistance in the morning, but the Wave structure has a lot further to go.

Gold sliced through its 50-day moving average at 1303.72 today. My comment in the Closing Commentary about not pausing for a bounce above the 50-day was spot on. It is still possible that gold may retest the 50-day from beneath, but that may not be a trading opportunity. Chance are that it may not pause, or pause only briefly, until it reaches the Lip of its Cup with Handle formation near 1183.00.

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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