sp500 Confirmed Weekly Sell Signal Today

The sp500 is confirming a weekly MACD histogram sell signal today and today’s action puts the market in my opinion now in ‘bear mode’ for the near term and intermediate term future.

We correctly turned to a BOT Short Signal on the market on May 11, 2011 at 1338 and since then the market has complied with the signal.

I expect 1250 to be tested on the sp500 eventually.  How long that would take is a guess at this point but generally speaking downside price action tends to be faster than upside price action.

I am a bit confused at this point on whether the June 13, 2011 turning point has occurred a few weeks ago or whether the sp500 is moving into a panic low on June 13, 2011.  It is still too difficult to make a decision on that point.  It does seem as though the turn has already occurred and the current negative price action is a sign that the cycle turn is occurring NOW and that this could be an important phase shift for the market.  But I will keep an open mind and see how the waters look as the weeks progress.

sp50020110523

We are currently declining within a somewhat orderly channel and the downside volume today on the SPY ETF was relatively light.  We need a downside break down through the current down trending channel to see more volatile action, perhaps somewhat similar to the March 2011 price action.

The swing low at 1250 should be tested! It was a very high volume swing low and sticks out like a sore thumb.  It will be difficult to exceed and should also mark an important stopping point/ swing trading range point for the markets.

I also suspect that the precious metals will move opposite the broad market and feed off paper equity weakness.

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9 comments on “sp500 Confirmed Weekly Sell Signal Today
  1. RMT says:

    Tom,
    Can you explain the weekly MACD histogram sell signal a little more?

  2. ed says:

    I have a very reliable indicator that pops up once in awhile that tells me tomorrow will be a good day. After that, don’t know yet

  3. RMT says:

    Ed,
    would you like to share your indicator?

  4. Larry says:

    We have been in this spot before and managed to eeeek out a new high for the market. All analysts calling for a reversal but with the Feds pulling the strings, it is a crap shoot. I still say up to sideways till the fed pulls the money. I dont see the market breaking 1249 which is the monthly SAR.

  5. ed says:

    RMT It would be a little difficult to explain the methodology here, but since it really didn’t work today, you probably don’t care

    Everything looks awfully bearish technically. I see Head and shoulders all over the place. Still I will reaffirm my previous post. We are being set up by the Fed. I’m not being paranoid, I have just seen this too many times in the last 2 years

  6. Tom says:

    RMT,

    Just look at this weekly chart of the sp500 in the link below and note the blue dotted lines which identify the weekly bearish triple M and then the horizontal red line which identifies the level under which confirms the weekly histogram sell signal.

    The weekly CLOSE under bar C is the confirmed weekly MACD histogram sell signal.

    http://www.bestonlinetrades.com/images/bearishhistogramsell.gif

  7. RMT says:

    Ok thanks for that chart, that makes sense. But the week isn’t over yet, and if the magic hand of the Federal Reserve can push this market sharply higher by the end of the week, we may not confirm.

  8. ed says:

    Tom I don’t think you get it. The Fed has manipulated the market for some time. You don’t think they have people who can engineer your bearish chart to fool technicians like you and me and then slam us?

  9. Tom Tom says:

    Yes they probably can and will do as you say… but then eventually the technicians will gain the upper hand again, but it may take a very long time.

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