First, Triangle chart on a Weekly Buy and well above a reversal Short. These are trend following charts, they are not predictive, they are in the now and only in the now:
Next up, S&P 500 Weekly analysis chart, same old, same old: In a sideways to upward tilt in a Wave 4 consolidation before next leg down. Each successive week has this chart closer and closer to its breakdown as is best evidenced by the False Bar Stochastic reaching overbought and reversal levels.
Directly underneath this Weekly S&P is the Weekly VIX. Take special notice of each and every time the VIX Stochastic reached oversold levels, as it is now. Take a ruler or any straight measuring device and connect the dots, only in this case, not dots, connect oversold areas on the VIX to major TOPS in the S&P:
Finally and especially for all the new readers to this blog, the Weekly S&P analysis is my big picture view of the equity markets. That view is of a multi-year bear market that on occasion, as is now, will pause, rally, consolidate, refresh itself and then dive lower. I would like to catch those turn-downs much more then I care to exploit the rally phases. Although I do utilize models that trend follow and accordingly do follow prices no matter what direction they are going (currently up), the big guns are set on those lucrative, juicy declines.
The Weekly charts are my GPS, pointing in the direction of the true trend that will assert itself in a big way when and only when the market decides the time is right. The next big decline will start off as a simple short term reversal in trend. That's why every short term Sell is important, because one of these days, it will be THE one we are looking for. By taking every short term Sell signal as it appears, there will a pretty damn good chance of being Short when the next tsunami into the abyss occurs.
Question: What if you are wrong, Allan, and the market is in a major Bull Trend toward new all time highs?
Answer: The best, most profitable parts of bull markets come in the middle and end (remember 1995-1999?), so I'll be late to that party, but will enjoy its fruits, eventually. My charts are dynamic, if they pick up on the bull market thesis, I will become just as adamant on the long side as I am on the short side now.
BUT THAT HAS NOT HAPPENED, IN FACT IF ANYTHING, THESE CHARTS ARE CONFIRMING THE BEARISH CASE WITH EACH PASSING WEEK.