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AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market Trigger Points and Sell Signals

Stock-Markets / Stock Markets 2014 Feb 12, 2014 - 03:51 PM GMT

By: Anthony_Cherniawski

Stock-Markets

The Pre-Market is flat this morning. The SPX made a perfect reversal pattern and now it needs the decline.

The trigger point (make sure you are short) in SPX is the 50-day moving average at 1809.25. I normally would expect to see a stair-step decline through the rest of the week, but anything may happen.


The VIX buy signal (short the SPX) is mid-Cycle resistance at 14.72, only 21 ticks from yesterday’s close. Since it crossed that line only in the last day, there was no point in giving a sell signal.

The amazing thing about the rally is that the Hi-Lo index never gave a buy signal, staying beneath its mid-Cycle resistance at 166.11 during the entire week. That means the entire NYSE was more badly battered by the decline than originally thought. And the low volume rally did nothing to undo the damage.

It is very critical to recognize the “trip wires” since the decline may wipe out all vestiges of liquidity left. Remember, the past year’s rally was likely done almost entirely on margin. A drop below 1737.92 may spark a huge margin liquidation with few or no buyers at all.

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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