In last (week's) post, I ended with "...followed by more downside over the coming days..."
Yesterday's action firmed up that view as well as technically shows a chagne in trend.
/ES (S&P500 futures)
The weekly ES charts show a trend exhaustion after euphoria, with a weekly divergence on the MACD. The daily chart has already given a Sell signal on 22nd February, the day after my last post. Yesterday's price action firmed that it is likely to be a down week with the ES looking to correct at least to 1400-1425 range.
VIX
The VIX spiked. The weekly VIX MACD is about to breakout into bullish area and this is a worrying indication for some. The daily VIX spiked out of boundary into an extreme area and from previous patterns, tends to be out of the bands for some time before moderating. This time is particuarly strong(er) and can expect more downside correction in the overall markets as the volatility spikes for a couple of days.
/DX (USD futures)
While the S&P500 tanked, the VIX spiked, the USD had already been rallying over the last couple of weeks. Again, with a higher USD, we tend to see more downside on the S&P500.
TLT (Bond ETF)
The TLT ETF already clocked in a weekly Buy signal.
Go figure.
Time to be cautious...
The MadScientist
25th February 2013
Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.
Charts are from TD Ameritrade Thinkorswim platform
