We are big believers in staying in harmony with the market trend so we don’t try to get out at the top, but we do keep track of various signals that tend to be good indicators of market movements. We haven’t seen any of these signals in months, untl today. Today we saw an anticipatory set of signals without a confirmation, that together are a fairly strong indication of a reversal.
1. Intraday high prices of the market have increased to a 21 day high while the advance/decline oscillator is negative. This unusual event is read as a very strong bearish signal that is often followed by an downward price movement.
2. The new high/new low indicator has reversed to the downside. This is a reliable bearish signal that is often followed by an downward price movement.
3. An upturn in the VIX.
In this sideways market a downtrend could start shortly.