Trend Check with Tushar Chande

If You Only Learn One Lesson From This Sell-off (Learn This One)

by Tushar Chande

The recent sell-off in the market is among the worst 10 sell-offs since 2010 (see Chart 1), which means a rebound cannot be too far away. The all-important gauge of market skittishness, the $VIX, has not exceeded the level of 50 identified as the peak in my previous post, and has now closed below the five previous closes, implying that the most intense selling panic is probably over (see Chart 2).  The bottoming process is not complete, and may take various forms, and depends on  whether we get a "V" bottom or a re-test of the lows over the next 1-4 weeks (as in 2015-16) or Read More 

Trend Check with Tushar Chande

$SPX Forms Key Bottom Near 2600 (As Expected)

by Tushar Chande

In my post on Jan 27 I wrote about the $SPX that a "a drop to 2600 is not impossible" and showed a 50% retracement level at 2598.50.  Today, the market bottomed at 2593.07 within a whisker of my forecast.  The blow up in the $VIX index suggests a tradable bottom has formed, though we will need several days of backing and filling, and even a retest of the low.  Wall Street conventional wisdom gurus have also called this a bottom, so we can expect a bottom building process to commence at these levels.   Chart 1: The $SPX found Read More 

Trend Check with Tushar Chande

Markets Fall Out of Parabolic Patterns After Well-timed Warning

by Tushar Chande

After my well-timed warning last weekend, the markets fell out of their parabolic patterns on Monday, responding to the external trigger of rising rates.  For example, the New York Composite was the first to fall out of the pattern and fell decisively all week (see Chart 1).  The external trigger was the rise in rates (see Chart 2).   I had discussed the risk of  rising bond yields in a earlier post on January, 11.   The stock market conveniently reversed after reaching the upside Dow target range that I identified two weeks ago (see Chart Read More