SPX Stocks Index Still on a Sell Signal
Stock-Markets / Stock Markets 2015 Jul 07, 2015 - 11:45 AM GMT
There is a big hole in today’s trading session during which trading was halted. Stocks soared during the halt and quit rising just as soon as the problem was supposedly “fixed.” How can we trust a market like this?
Right now I am taking the approach that the zigzag decline may have been a sub-Minute Wave (b). That means Wave (c) is underway and is likely to finish tomorrow. I should note, however, that SPX could easily reverse on a moment’s notice and that it remains on a sell signal.
VIX actually closed higher today, despite all the hijinks in the market. If it follows the SPX pattern, it may have completed Wave (b) this morning and Wave (c) may be underway this evening and tomorrow.
The Hi-Lo Index actually closed at a new low today, suggesting underlying weakness in market breadth.
In summary, all of the indicators remain on a confirmed sell signal. All we can do is sit tight until the rally works itself off.
EuroStoxx 50 lost its neckline support today, suggesting things may become much worse for all of Europe, not just Greece. Meanwhile, the ECB appears to be keeping Greece on hold until the banks run out of cash.
A breakdown of private commercial banks and sovereign economies shows a considerable exposure to a Greek default. It now becomes a question of which dominoes fall next?
Crude oil and other industrial commodities took a plunge today as well. We may see some commodities-based hedge funds carried out on a stretcher very soon. The Cycles Model suggests the decline may continue through the end of August.
Regards,
Tony
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