as discussed in the may 1st video and post (click here to view the post with link to the video included), the $NDX RSI weekly sell signal was confirmed by a bearish macd cross-over last week (the “filter”). here’s the previous chart along with the updated chart. if you have not had a chance to read that post or view the accompanying video, i believe that it’s worth taking a few minutes to do so. i find these longer-term sell signals invaluable in trading as they help to formula a longer-term bias that can often help you identify the early stages of a new trend and keep you on the right side of that trend by seeing the forest thru the trees while other traders get whipsawed to pieces trying to continually buy the dips (or short the rips) or getting stopped out of both longs and shorts as volatility (price swings) start to increase and the market chops around, running the stops of bulls and bears alike during the latter stages of a bull-run and into the early stages of a new downtrend (ditto on market bottoms).
again, this sell signal is only one of many factors, many of which have been posted here over the last several months, that support my view that we are most likely in the early stages of a much deeper decline vs. the latter stages of a typical correction. i’ll do my best to continue to search for evidence to refute my current bias and will share anything that i think is worth noting although i also try my best to keep my analysis as streamlined and straightforward as possible to avoid to the usual “well, i think the market is going to go up…or i think the market is going to go down”… analysis that is unfortunately all-too-common today. i can make a technical or fundamental case on any given day that the market will go up or the market will go down. however, the only time i make money trading is when i pick a side or at least trade superior technical patterns on individual stocks, even if my take on the market proves to be wrong. as most of you know, i also have no problem stating when i am unsure of where the market might be heading and sitting in cash or hedged as long as it takes before i see a good R/R opportunity on an individual stock, sector or the broad market. good trading this week and remember that this friday is OpEx (options expiration day) plus the uber-pumped up Facebook IPO starts trading so expect some likely volatility for the remainder of the week.
