SPX cleared and retested Intermediate-term support/resistance now at 2256.83 this morning. It was a pleasant surprise to see it begin a new impulse lower. Although shallow, the new impulse tells us that there is room to decline. It is also a prime candidate for a flash crash as early as today. If the decline remains impulsive and gains momentum, we may see a low as early as Tuesday mid-day. SPX is on a sell signal.

VIX is challenging its 50-day Moving Average at 14.14 (14.00 in the daily chart). Once above it, VIX’s status changes to a confirmed buy (SPX sell). An additional breakout above the late November high at 14.72 makes the signal all the stronger.

The NYSE Hi-Lo bounced from its low but remains beneath its 50-day Moving Average at 97.42. This is considered a confirmed sell, especially since it closed beneath that level the past two days.

The USD hit the 101 handle today and remains trading near its lows. All of these a signs of a troubled and illiquid market.

TNX declined to challenge its Cycle Top support at 24.39. This may not be the time to purchase T-notes or bonds, since it has another 4.3 to 6.14 days before reaching its peak and the USB/UST Master Cycle low. 10-year yields may reach 2.7% by the time this is over.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals.

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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