SPX has now formed a seven-point reversal, normally seen as a five-point reversal. This is typical when there exists a need for delay combined with a high degree of emotion in the market. It appears to be challenging the Intermediate-term resistance at 2073.31.

The sell signal is reaffirmed when SPX has fallen again beneath the 200-day Moving Average at 2067.31. Confirmation that the sell signal is still supportable when SPX falls beneath today’s open where the Orthodox Broadening Top trendline lies at 2045.

A rally to the close would constitute a 40.5 hour Cycle, which is divisible by 4.3 and Pi.

VIX also tested its mid-Cycle support at 17.16 and its Bullish flag trendline nearby. Normally the VIX status goes from confirmed buy to aggressive buy beneath the Cycle Top support/resistance at 22.09. This may be recognized by a day trader, but not in our case.

The Hi-Lo Index appears to be nearing the close of the day at a sell signal, despite the rally this afternoon. This is the third-worst day for market internals while the SPX rallies.

TNX may have made its final probe higher this afternoon shortly after the Fed announcement. Today actually was a Primary pivot day, so we may now see some follow-through to the downside.

Regards,

Tony

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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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