Today’s SPX managed to stay in the black, but it’s a Pivot day. This bounce is not a good omen for the market for that reason and the fact that it remains under the hourly Cycle Bottom resistance at 1923.36.

It gives us confirmation of the Wave structure illustrated on the chart. A Wave [iii] would continue to stay under Cycle Bottom resistance, while Wave [iv] may venture inside and Wave [v] ride above the Cycle Bottom until completion.

The hardest thing to do in these big swings is to stay short. The wide swings stir up the “fight or flight” emotions in us. But these wide swings are also what tears the market up.

The next move may be quite substantial, so stay short for the time being. We may see one or more market-wide closures as we are seeing individual company trading halts at this time.

The VIX appears to be hovering, waiting for it Pivot (today). This could send the VIX to new highs.

Meanwhile, VIX ETF shorts are being squeezed for the third day. This will allow VXX and the other ETFs their breakout above Monday’s high.

The NYSE Hi-Lo Index put in a lower high this morning and is back beneath its 50-day Moving Average again. This is due to indiscriminate ES and E-Mini purchases in the Premarket futures. Please note that this does not suggest an improvement in the Hi-Lo, since at best there were still 15 new 52-week lows on the NYSE today.

I expect to see a real washout in the Hi-Lo Index when this decline is done.

TNX is rising in a corrective pattern that appears to be over. If so, liquidity will be flowing back into Treasuries, causing yields to sink like a rock. Ending diagonals are tough to analyse because they are often disorderly and stretch the rules.

MUT is also caught in an inside formation. The direction of the break will determine the final outcome. However, we have a chart pattern (not shown) that indicates a much larger decline to come.

Regards,

Tony

Our Investment Advisor Registration is on the Web

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

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.

Anthony M. Cherniawski Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.