Stock Market Connfirmed Sell Signals

By: Anthony_Cherniawski

SPX appears to have completed yet another impulse and retracement, stopping at the 50-day Moving Average. Confirmation come at the re-crossing of the trendline, now at 2090.00.

Lance Roberts has an insightful piece about the Incredibly Bearish Bull Market. The bearish divergences are mounting, yet investors are still attempting to “buy the dip.” That is, until today. If the 50-day Moving Average holds, the markets may get ugly in a hurry. With the majority of investors :all in,” there may be less money on the sidelines than what we are being told.

The double whammy of the loss of key support and crossing the Megaphone trendline may trigger a panic decline with little or no liquidity. In addition, Ending Diagonal support may be lost beneath 2083.00, virtually assuring a further drop of at least another 100 points to 1980,00. Even more supports may be broken in the process.

VIX has triggered its “confirmed see” signal, even with the pullback. We should be nothing else but short equities.

In his Outlook For the Dow, Martin Armstrong uses the 1929 Dow to suggest that the Market may go considerably higher after a “false move” to the downside. Although there is some possibility of that occurrence, I think he is using Fractal Similarity on the wrong Wave. The false move which bottomed in June, 1929 was a Minor Wave C of Intermediate Wave (4) of Primary Wave [5] of Cycle Wave I. We are nowhere close to that position here. In addition, the Wave (4) appears to be a flat, while we are in and Expanding Diagonal Cycle Wave (b) of Super Cycle Wave [IV], possibly two degrees larger than 1929.. Sorry, I don’t buy it.

I am glad that he is warning investors of a decline, but we’ll see who is right concerning the degree in a matter of weeks.

The Hi-Lo index is also on a confirmed sell signal.

Good luck and good trading!

Regards,

Tony

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