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Market Update [4-16] + Weekly Update [Week of 4-19]

|Includes: DIA, IWM, ONEQ, SPDR S&P 500 Trust ETF (SPY)

      Today what I had though might happen did. Despite of, and maybe due to good earnings reports, there was a widespread sell-off and run to safety on Friday. However, we won't panic and sell yet. Not a single of the four major indices broke their up trend line on Friday. [breathe sigh of relief] The market has moved up a lot over the last month or so, and Friday was a sell-off. Is this the start of a new down segment? Well volatility spiked on Friday in the biggest single-day move up in volatility since 2-4. This would suggest that this sell-off on Friday was not just a breather, but the end. However, we wait for the break of the trend lines across all 4 indices to sell short. Here is the really troubling bit. Friday's volume was the single biggest volume down day on SPY since 3-20-09, right after the market bottom. This could be a good ride down. However, we wait. Also, the low on Friday for SPY was right at the 13-day moving average. SPY has been ended every day above the 13-day moving average since 2-12 when it broke out to start this uptrend. There were very strong sell signals Friday, but I'm going to wait for the confirmation of the break in the trend line and 13-day moving average to make a short position. Another thing of note is the weekly chart. This week the market went up and established a new high only to erase those gains later in the week, forming a very bearish formation. Due to the fact that it's on the weekly chart, it's given even more credibility. That's another strong indicator of the end.

Happy Investing,

           Charlie

 


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