Yes the S&p 500 fired warning 1 today by closing below my CBL line. We are still in that accelerated blue channel I drew a week or two ago, so slowing down a bit just seems natural to me. That climb angle was just to steep to continue forever. The red line below the CBL is drawn to show the last pivot low and that is where I would really expect price to stop going down and reverse. Warning 2 is $1756, so we still have a bit to go. Concerned yes, bailing out? No.
Yes 3 days of a sharp pullbacks but we are still safe here. No warnings fired yet.
The International Index really does have me concerned. Warning 1 and warning 2 fired in back to back days. We did not take out the last pivot low, but it was tested today. Let’s just say if prices do not reverse tomorrow in this index, it is going to be in trouble. I did say two weeks ago that the type of wedge that was drawn on the chart had no pattern on direction of breakout and would have to be watched closely. Unfortunately it looks like we might be heading lower.
Thinking of bailing to bonds because the stock indexes are getting pounded a bit? Be careful because they are also under attack and even the base that it has built is being tested. If you are going to run from stocks, I still feel that the G-fund is the best place to rest.
Conclusion: It is just way to early today to make any calls on any of the indexes. Even the International has room to fall before a sell is fired. If you’re watching the monthly charts, you will see that we have hardly flinched so be patient and let’s see where we go the next few days. December is normally a good month and we are just getting started so, be patience grasshopper.
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