This is a good sell signal. The cross beneath the lower trendline of the Broadening Wedge has a 94% probability of success. Further confirmation of that signal would be a decline beneath the 50-day Moving Average at 2059.94. However, those who “loaded up” yesterday are being rewarded.

NDX has also triggered its Broadening Wedge formation. Unlike the SPX, it doesn’t have to “throw back” inside the formation.

VIX has broken above the Short-term resistance at 14.58 and its prior high, giving us an aggressive sell signal on SPX. We should see a challenge of the 50-day Moving Average in the next 24 hours or so, which would give final confirmation of the signal.

The NYSE Hi-Lo Index has given its sell signal. This is what we have been looking for. It’s time to go short the stock indexes.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

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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