After the Bell, That was a pretty good sell-off today, on the SPX it broke down through the 9 day MA. support, and closed right below it. The 50 and the 20 day MA are also getting much closer to a cross-over. And the Full STO is in over-bought territory and is starting to show a sell signal.
The breadth was 4.32:1, decliners on increasing sell volume.
Things are again back in the Bears control, as the trend now seems to be down. Breaking below 1084.90 would further confirm a down trend, and breaking above 1109.80 would be short-term bullish move.
The way the Russell is acting, by not making a new high in close to two and a half months, and in a more bearish pattern I believe the SPX might of made its high for the year. The one thing that would make me rethink that would be a substantial increase in buy volume, and that has not happened, in fact the buy volume has been deteriorating during the last two rallies while sell volume has increased.
The question now is will SPX will follow the lead the Russell has already set and head into a more bearish downtrend. Things should become clearer in the next couple of weeks, I would expect the Russell to accelerate its down trend, if in fact it really is now in a 3rd. wave down, it should be obvious very soon.
Todd over at
Elliott Wave Principle has a very good write-up comparing the strength of the various indexes today!!
I posted this one because one the simplest forms of Technical Analysis is when the 50 day MA crosses the 20 MA, a new trend has taken place. Now the 50 MA is acting as resistance, and the 20 MA as support on the Russell. Also notice the Full STO indicator, peaked in overbought territory and now on a sell!!
9:00, A quick look at the comparison of the SPX and the Russell, showing how the gap between the two continue to widen as investors bail out of the small cap, high beta stocks first.
8:32, Here are some of the options on the SPX, a 1-2, 1-2, that has been built the last couple of days, with the 5th wave finished on the November 17th. A failed minor 5th completed at the close on November 18th, or this whole piece could be part of a larger degree 4th wave. Breaking down below 1084.90 would further confirm that a trend change has taken place in the SPX. The Russell continues to be the most bearish looking.
Breadth currently is 7:1, decliners.
Yesterday there were 163 new 52 week highs made, today that number has dropped down to only 9 new highs showing weakness across the board.
7:08, WOW, the market surprised us this morning, not sure if we had a failed 5th, or were in the process of making a 1-2 over the last couple of days. On the SPX this so far can also be counted as the "C" wave of the 4th, but on the Russell, wave 4 would of entered wave 1.
Breadth at the time is 8:1 decliners.
The Summation Index is simply a longer range version of the McClellan Oscillator. Whereas the McClellan Oscillator is used for short to intermediate trading purposes, the Summation Index provides a longer range view of market breadth and is used to spot major market turning points. This is one chart to really watch because it is so close to showing a trend change. During the last rally the Summation Index was diverging from the NYA, moving down as the index was heading higher. This should be a red flag for the bulls if a lower low is made, and it is very close to doing so now!!
This is a chart of the number of stocks above their 50 day MA, with an overlay of a 9, 20, and 50 MA. It also is showing negative divergence during the last two rallies, never making higher highs as the SPX was doing, again showing that fewer stocks are participating in the rallies as less and less stocks are strong enough to hold above their 50 day MA.
The McClellan Oscillator, a momentum indicator that is applied to the advance/decline statistics. The McClellan Oscillator is now giving a sell signal after breaking below zero, meaning that the 19 day EMA has crossed the 39 day EMA on the NYSE advance-decline issues.
The Bullish percent index, based on Point and Figure chart is now giving a sell signal after surpassing 70% into overbought territory, and reversing more then 6% to the downside. It is also showing the same divergences as the above charts.
This is a longer term daily chart of the SPX since the bottom back at 666. there are sell signs on the MACD, TRIX, and PPO. This is the count I am carrying, but I am not 100% confident in these counts. It has been one weird and very hard to count corrective wave. The most interesting part of this chart has been how the trendlines have developed, turning from support to resistance as the SPX as moved higher, but with less enthusiasm as time has gone by.
Bed time, more in the morning!!
I am working on charts and adding them as I finish, will add commentary when all the charts get uploaded, possible Saturday morning before I am finished
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