Stock Market Aggressive Sell Signal on Deck
Stock-Markets / Stock Markets 2016 Jun 09, 2016 - 06:38 PM GMT
SPX opened down at 2115.65 leaving a gap of nearly 3.5 points. It appears that the gap may not be filled, which suggests the next leg down is about to begin. The support at 2111.00 has been broken, so the next level to be tested is the double trendlines at 2085.00.
VIX appears to be consolidating between its 50-day Moving Average at 14.50 and its 2-hour mid-Cycle resistance at 14.73. It also left an open gap at 14.00 and doesn’t appear capable of filling it. These gaps, by the way, are indicators of a third wave in action.
This is an aggressive sell signal for stocks.
TNX appears to have complete an impulsive decline and is due for a bounce. The likely resistance for it may be the Triangle trendline. But the damage has been done. The decline is underway.
ZeroHedge writes, “Yesterday we warned that a combination of extreme short positioning in bonds and Treasury yields sitting at a crucial support level meant trouble was looming. Today that 'support' level of 1.70% for 10Y yields has been well and truly broken as 10Y trades to 1.66% - its lowest in 4 months...
Across the entire Treasury futures complex - from 2Y to Ultras - net aggregate speculative positioning is about as short (in 10Y equivalents) as it has been since 2010...”
Many traders have not recognized the Triangle formation and its implications. This could be a bloodbath for the bond shorts.
This action also supports an aggressive sell signal in stocks.
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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