My timing signal remains positive, but it’s loosing momentum and could flip as early as tomorrow. I’d say it’s a 50-50 shot as to whether the markets turn around or sink, and I wouldn’t be betting big.
I’m currently sitting on the sidelines as my trading has been poor lately and that’s another sign that has me concerned. When momentum stocks don’t perform it tells me the markets are running on fumes. Maybe we just needed to rest for a few days and there hasn’t been any technical damage on the major indexes that can’t be repaired (not like silver) with a few white candles.
The head and shoulders remains in play, but with four days of selling on rising volume has this pattern in major jeopardy. If it fails the markets should fall hard and fast.
I view today’s sell-off as a vote that the markets will drop further, but we do remain in a tight channel. Watch out for that massive gap from Feb 20th.
