SPX bounced off its trendline possibly completing a Wave (i) decline. The bounce may take it back to Short-term resistance at 2474.92. A failure here may have some profound implications, so we use the bounce to add short positions.

Alternatively, this morning’s gap may not be filled. If so, the trendline at 2462.00 gives us another chance to add short positions.

VIX as not only gone above its 50-day Moving Average, but broke out above its 2-hour Cycle Top, giving a confirmed buy (SPX sell) signal. It seem to have found temorary support at the Cycle Top, but may retest the 50-day Moving Average. The new Head & Shoulders formation gives us a minimum target.

The NYSE Hi-Lo Index just made a negative reading for the first time in five weeks. Apparently the trendline is at -5.00, so we will need a reading under that to confirm our sell signal.

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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