The final surge in SPX hit Cycle Top resistance at 2013.51 where it appears to be repelled. A cross beneath the 50-day Moving Average at 1994.49 puts SPX back on a confirmed sell signal.

SPX has a new bearish profile with an Orthodox Broadening Top formation. A final peak that is lower than the second peak of the formation elevates the probability of a negative outcome to over 80%. Once SPX declines beneath the lower trendline the chances of meeting its proposed target is elevated to as high as 96%.

Note also the squeezing of the trading bands. This is an indication of a very large move, usually in the opposite direction of the band that is being challenged.

This has all the earmarks of a sucker’s rally.

VIX has also complete its Minor Wave C at the Cycle Bottom line at 16.88 and is bouncing higher. VIX remains on an aggressive sell signal until it exceeds its 50-day Moving Average at 21.33.

Note the squeeze play in the trading bands here, as well. This may be a setup for a gap higher in the morning.

The Hi-Lo Index ratcheted up to 91, but stayed inside its bearish Flag formation.

TNX may have just completed its retracement to the Intermediate-term resistance at 21.17, missing it by 4 ticks. We may see a probe higher, but the futures do not support that thesis at this time. It appears that the bearish trend in yields is about to resume.

Have a good night!

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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