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Swenlin: "beginning of a more substantial decline, but short-term indicators are so oversold"

From Carl Swenlin's free Friday weekly short Chart Spotlight please click on the link to see his short commentary and very useful charts.

I don't have time to comment on his views right now, I'm just passing them along, I will just note that Swenlin turned bullish in Mar 2009, and that whatever his expressed opinions, he's always been disciplined in strictly following his trend-following signals.

"The S&P 500 has finally decisively broken down through the support formed by the rising trend line that marks the bottom of the ascending wedge formation...The first obvious support is at about 1030, not a real problem; however, the next obvious support is at about 870...In the short term the market is very oversold...Bottom Line: We have just witnessed the worst three-day decline since the March 2009 bottom. I think it is the beginning of a more substantial decline, but short-term indicators are so oversold that the next thing we will probably see is a bounce. The most important thing to watch in the medium term is for 20-EMAs to cross down through 50-EMAs. In most cases, this will change buy signals to neutral signals, except where the 50-EMA is below the 200-EMA at the time of the 20/50-EMA crossover. That would be a sell."