The Stock Market is an Accident Waiting to Happen
Stock-Markets / Stock Markets 2016 Oct 20, 2016 - 05:09 PM GMT
It is abundantly clear that the market decline is being suppressed. However, the decline continues. In the Mid-week Report I put the Master Cycle low at the October 13 low (2114.72). I am not sure that it belongs there yet, due to its shallow nature. In addition, the retracement that peaked out at 2149.19 is unusually small coming from a Master Cycle low. The markets appear to be winding up for a big decline and if there is an “accident” this week, we may still have our flash crash marking the true Master Cycle low. So far, it still has us guessing, but either way, it appears to be bearish.
It appears that SPX could lose its grip beneath the support lines at 2124.82.
You can see the repression in the VIX , which consolidated al day in a very narrow band. The double VIX ETFs, both declined to their earlier Master Cycle low, the maximum decline for a Wave 2.
VIX remains on an aggressive sell which becomes confirmed above its daily mid-Cycle resistance at 15.53.
Caution is advised, but the sell signal remains intact.
The NYSE Hi-Lo is back beneath its double resistance and may remain on a confirmed sell provided there is no ramp into the close today.
You get the feeling that the entire market is “on the edge” today.
USD made a new high today at 98.40, challenging its Cycle Top resistance at 98.35. What had earlier appeared to be a reversal was a Wave [iv] or (iv), instead.
Today is designated as a Trading Cycle Pivot (60 day), which is usually a low. Instead we see an inversion high. However, a Master Cycle low is due in the next three weeks where a significant low may develop.
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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