SPX gapped down to 2380.72, beneath the probable Wave [b] low. There is likely to be an attempt to fill the gap, a mighty undertaking at this level. I would rate this morning’s decline as an aggressive sell signal, subject to some blowback. A partial short entry may be advisable.

VIX gapped up in a way not seen for quite a while. It is likely that VIX may retest the 50-day Moving Average at 11.97 before going higher. Any longs taken here may be subject to push-back. But the reversal appears to be underway.

Daily mid-Cycle resistance is at 12.92, so today’s signal is also aggressive with a confirmation on the breakout of today’s high.

Buy on the pullback.

The NYSE Hi-Lo has made its sell signal, subject to a close beneath the 50-day Moving Average at 86.78. The VIX and Hi-Lo combination may be considered a high level confirmation of the reversal, although still on the aggressive side.

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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