The OEX added a ST Trend Model SELL signal yesterday, and today the SPX will join with its own ST Trend Model SELL signal. These signals are generated on 5/20-EMA crossovers. When it is a positive crossover, it is a BUY signal. When it is a negative crossover, the signal can be either a SELL or Neutral. To determine which bearish signal to use, note the placement of the crossover. If it occurred above the 50-EMA it is a ST Trend Model Neutral signal. If it occurred below the 50-EMA (like today's signal), it is a SELL signal.
Even if price had closed at today's high, this negative crossover, would have still occurred. The best news is that support at the 2700 level is holding. If we can get a rally off this bottom, we could be looking at a very favorable inverse head and shoulders pattern. We don't have a higher low on price yet, so we don't have a bounce or reversal yet on the daily chart. The PMO has topped, but that is to be expected on a decline like we have had since last week's top. A PMO SELL signal here would concern me a great deal, but so far so good. Be sure to read my DP Alert tomorrow. I'll be going over all of the indicators as well as Dollar, Gold, Oil and Bonds.
Technical Analysis is a windsock, not a crystal ball.
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