Good morning lab rats!
Back in mid-August we warned you that market was approaching stall speed(Market (SPX) is dangerously approaching stall speed).
Three weeks later market experienced a sharp correction.
Yesterday our model just flashed red.
Unless the market moves spectacularly higher in the next couple of weeks, our model will probably confirm yesterdays signal.
So what are the implications.
According to the current data, market is in a deep stall situation and probably sooner rather than later will succumb to gravitational pull.
Our hand is on the sell to close button...In case we have a confirmation of our signal in the next couple of weeks, we are going to hit it and remain out of the market.
Market conditions these days are eerily similar to market conditions back in spring 2015.
An ascending wedge is forming with quickly deteriorating market internals...
It seems like the ascending wedge will top out at 11100 (Nyse composite) around US elections.
After that and if history rhymes market will initially move towards 10000.
Sorry bulls...For the time being these are the facts...