Tuesday, October 27, 2009
Earlier in the year this chart warned of another leg down in the equity markets that would challenge then exceed the March, 2009 lows. While the index rose 65% from early March, this chart kept me from significant participation in the rally. My bad.
Today the SPX is poised to confirm the Wave 5 Sell Signal by a drop through the rising trend line from early March and the BWT & ATR Sell thresholds. Those levels sit at approximately 1065 for the trend line, 1035 for BWT and 1030 for ATR. A confirmation for any of those thresholds requires a Weekly close below those levels.
Note that any such close this week will likely also trigger a False Bar Stochastic Sell Signal.