SPX has retested the rising trendline, making a 75% retracement of its decline from yesterday’s high. It appears complete or nearly so. If correct, we should see the decline resume in earnest this afternoon.

ZeroHedge reports, “After a very modest bounce in April, Philly Fed fell again in May, printing a disappointing 6.7 (against 8.0 expectations). Philly Fed has now missed 5 of the last 6 (and 7 of the last 9) months. While new orders picked up, prices paid plunged at recessionary pace, inventories tumbled, and the average workweek slumped. Hope also tumbled as future expectations dropped.

Philly Fed hovers nears 15 month lows...”

VIX appears to be putting in a higher low, although a very steep retracement. The algos still appear hungry for the blood of hedgers as VIX is being suppressed near the lows. An aggressive sell signal is generated above the 50-day Moving Average at 13.94. The signal is confirmed above the hourly ccle Top resistance at 15.12.

Hedgers, take heart. Sir John Templeton once said, “The best time to buy is when there is blood in the street, especially when it’s your own.”

The Hi-Lo index is drifting lower, but no sell signal yet. The 50-day is at 70.38, so a close beneath that level may give us an aggressive sell signal from the Hi-Lo.

I’m off to meetings. More comments near the close.

Regards,

Tony

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