Major Sell Signals Confirmed

By Lawrence G. McMillan

$SPX has closed below 1495 and $VIX has closed (way) above 16.21, so those are sell signals on both charts.  Moreover, both equity-only put-call ratios have rolled over to sell signals as well.  In addition, the CIV sell signal arrived, as the average stock’s CIV has risen to the 23rd percentile (well above the 17th percentile, which is what was required for the sell signal).  There are other negatives as well – such as the major negative reversal that the market underwent on Monday (or, if you prefer – a outside down day).  All of these are important sell signals.

It is ironic that Monday was once again not a “90% down day” in terms of “stocks only” data.  Part of that is due to the strong upside opening that occurred.  It was a “90% down volume day” in NYSE terms -- just like last Wednesday was.  That did manage to produce a short-lived rally that eventually gave was to lower lows, so Monday’s action might do the same this week...

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