The market in general is pulling back since making all-time highs last week so it isn't surprising to see PMOs now in decline. The OEX couldn't hold on to its PMO BUY signal and I suspect another decline will start flipping the other three indexes' PMOs to SELL signals as well.
The OEX is traveling within an intermediate-term rising trend channel. It tested the top and has been moving lower ever since. Horizontal support at the January top failed to hold. The next logical support is at the February/March tops. However, I think price could find support before that along the less steep and shorter-term blue rising bottoms trend line. The OBV has really tanked which shows that volume is following this decline. In fact, it appears that volume is getting stronger as price declines.
Conclusion: "Volume leads price" is the saying we hear often in this business and there is a reason, because in most cases it is true. High volume on a decline like we are seeing on the OEX is very bearish. This is combined now with a new PMO SELL signal. Look for a decline to about 1255.
Technical Analysis is a windsock, not a crystal ball.
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