SPX peaked beneath formation resistance at 2087.59 this morning. We may need an alternate structure should it go higher. At the moment, the first level to watch is Short-term support at 2077.40. A decline beneath this puts SPX back on an aggressive sell if you have moved some money to cash. The 200-day Moving Average is at 2077.40, beneath which SPX may be on a confirmed sell signal.

The VIX tested its mid-Cycle support at 16.42 and rose above it, remaining on an aggressive buy signal. What is remarkable is that VIX did not decline nearly proportionally to the SPX retracement, suggesting that some big money is comfortable remaining hedged.

Gold ramped to 1082.10 this morning, giving the reversal signal above its Cycle Bottom at 1077.09. Odds are better than even of a bounce to 1120.00 with lesser probability of rising to mid-Cycle resistance at 1155.06.

Traders are buying gold here as a hedge against a large loss, as seen in August. However, anyone taking such a position should remain nimble, since the trend is still down and likely to remain that way.

Crude oil, on the other hand, may rally above mid-Cycle resistance at 50.43. Again, this is a countere-trend move and requires agility to enter and exit promptly.

In the meantime, the USD has fallen to its 98 handle, suggesting the probability of a fast-moving decline.

All the best,

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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