Stock Market Early Sell Signals
Stock Markets 2014Jul 25, 2014 – 07:27 PM GMT
VIX has completed its pullback to the declining trading channel trendline. This morning it has crossed above the 50-day Moving Average and is on an SPX aggressive sell signal. This would be confirmed above mid-Cycle resistance at 13.54.
SPX may end up bouncing at its Short-term support at 1975.19 or mid-Cycle support at 1973.41. The t op of that bounce would be the ideal short entry point. However, for those who have waited for this moment, it may be good to have a partial short position and add at the bounces. This is an old Jesse Livermore practice that I have adopted.
ZeroHedge has an article entitled, “The Bigger They Are, The Harder They Fall.” This suggests that a 20-30% decline may be in the offing. Of course, they don’t tell you when.
The Hi-Lo index is on a confirmed sell, subject to closing beneath 83.00 today. Should the market continue to decline another tranche of short positions may be put in prior to the close.
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