SPX made an 8.68 point gap down this morning and continued its decline to challenge Short-term support and the 2-hoour mid-Cycle support at 2268.22. Those that “took a chance” of that happening by going short last week may breathe a sigh of relief.

SPX has an aggressive sell signal that is not yet verified by the VIX. However, the decline is sharp and steady. Additional confirmation comes beneath the mid-cycle support.

There may be a bounce toward 10:00 am as the selling pauses and investors rush to “buy the dip.” Be prepared for volatility in both directions.

VIX is on the verge of breaking through its 50-day Moving Average at 12.51. At that point it also is on an aggressive buy (SPX sell)…

The Hi-Lo index is also on an aggressive sell signal. A decline beneath 0.00 would give a confirmed sell.

Regards,

Tony

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Anthony M. Cherniawski, President and CIO http://www.thepracticalinvestor.com

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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