This may be the end of the road for the rally in SPX. The irregular diagonal is the “best fit” for the last week of trading. Wave c of 5 may be finished, or nearly so. Crossing the lower trendline of the trading channel at 1566.31 appears to be the first warning that the uptrend is finished. Additional supports that indicate the end of the uptrend are 1553.07-1556.24 on the hourly chart.

Intermediate-term support is at 1533.08 while the 50-day support is at 1523.00. Those of you with dry powder may “feather in” more short positions at each of these levels, depending on your level of confidence. You should be fully short by the time the SPX crosses the 50-day moving average.

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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