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NavigateTheMarketStorm has I believe done a great job of warning on the lead-up to the new SPX All Time High that a major top was coming. This was based on my proprietary Technicals Model which had been negatively diverging at times since mid April, and about 10 pre-top Hindenburg Omens. Also spoken about the historically narrow SPX Daily Bollinger Bands (going back to 1970) and very low readings coming from my statistically driven Volatility Model. Low volatility like this can proceed large moves. Then came a sweet SPX reversal candle on August 8th.
I am neither BEAR nor BULL. Just trying to do some detective work to lead us to the next move. I have been showing for months the deterioration in internals, breadth, and participation at both the SPX Weekly and Daily scales. Yes there were more gains to be made, but we were ready mentally that a turn was going to come.
Today was a breather day for the markets, allowing VIX to decline. SPX daily made a large whiskered doji, but the thing I found most interesting was the positive divergences across the board on SPX hourly.
3 Hindenburg Omens on the SPX this week but none Friday. Read more about it under the Techniques menu at the top of my website. But just as a refresher, they mainly come before major tops, can occur during significant downdrafts and rarely do trigger at important bottoms. I am classifying the 5 that came after SPX ATH as the second category, the 5th such type since the All Time High.
There is a total solar eclipse on August 21st (Monday) as well as a Black Moon: Aug 21 (third New Moon in a season with four New Moons), read about Puetz Crash Windows under the Techniques menu at the top of my website. It doesn't say a crash must occur in these conditions, just that the more significant ones tend to across all markets. The previous FULL moon was on 8/7 which was 1 day before the SPX ATH, and the next one is Sept 6th.
Both my swing trading signals remain BEARISH (since 7/28 and 7/31). Some slight improvement in internals today, but remember they are maintaining a downward trend yet yes, some are coming off their bottoms. Participation was slightly lower for all but small caps. SPX A-D line remains below its descending 20 dma, remember it did not confirm the last SPX All Time High. The SPX McClellan made its 15th negative reading in the past 16. Looks like VIX needs a new high due to lack of negative divergences at Thursday's highs.
Noteworthy for my BULL friends, the SPX McClellan and my proprietary Technicals Model are currently positively diverging with SPX. These will have to be watched carefully, but to be clear, both of my swing trading indicators remain solidly BEARISH.
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