Today I got a sell signal on the markets indicating that it’s more profitable to be short here than it is to initiate new long positions. It pays to be on the side of the trend and the markets inability to continue it’s current advance can be viewed as a loss of momentum to the upside. It’s tough to know how to view any movement in the markets given the light holiday trading so it’s best to go forward with a note of caution. In addition whipsaws have been brutal these past few months so we have to consider that as well. It will probably be best to wait until after the holidays for that.
Here we see the RSI bouncing off of the upper trendline signalling a return to the primary downtrend. I was hopeful that we could break through that resistance, but it is proving to be to much possibly due to year end tax selling.
The Vix could be finding support here and if it bounces here this will be bad for the overall markets. Short term target is mid 50’s coinciding with the lower trendline of triangle.
