SPX is beneath the 4.5 year trendline. The formation is irregular, so to be safe, we should use the lower trendline of the Broadening Diagonal as a trigger to go short. That appears to be at or just beneath 2090.00. There is always the possibility of using the trendline as a support to launch another algo orgy. Of course, the ultimate safety for the shorts appears to be beneath the 50-day Moving Average.

VIX is rising again. No signal until above the 50-day Moving Average.

TNX has also resumed its decline in a probable Wave [iii]. It remains on a sell signal.

EUFN is subdividing down in a third wave. This can get very ugly.

European Bank Default risk is growing.

The extended Wave [b] during the Brexit vote makes this Wave 2 formation foreshortened and dangerous, IMO. The probability of a Wave [iii] of 3 of (3) about to happen is very high.

Is this why Ben Bernanke is going to see Kuroda? Even a concerted effort of all the central banks may not be able to stop this decline.

This is a dangerous game they are playing. Unfortunately, too many investors are giving them too much credibility.

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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