SPX touched the head & Shoulders neckline and has bounced back to the Ending diagonal trendline. It is probable that this trendline may stop the bounce, and if so, may propel SPX back to new lows beneath the neckline. The sell signal is confirmed beneath the Head & Shoulders neckline.

There may be a brief period of free-fall as SPX declines toward its Head & Shoulders target.

VIX hasn’t yet broken above its prior high, so it remains on an aggressive sell signal until it does. Once above 15.74 VIX will be on a confirmed sell signal.

The Hi-Lo index declined to the 2-hour Cycle Bottom support at -57.00. This puts the Hi-Lo on a confirmed sell signal. There hasn’t been much of a bounce, so we may see a resumption of its decline as SPX reverses back down beneath the neckline.

I will be on appointments until after the close.

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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