We went thru a tumultuous week of corporate earnings, political, financial and geopolitical surprises, some with dire unintended consequences.
Those of you who attended my last market timing webinar held on Monday January 18th(http://hamzeianalytics.com/Educational_Webinars.asp), should remember my dire warnings. Our charts had a series of bearish divergence setups. Brad Sullivan's comments were also spot on. Now let's go thru our proprietary charts:
Our Timer Chart shows a shallow rise, and not a hard spike, in Down to Up Volume Ratio. This is a mood change IMHO. SPX was at MR1 Level (Monthly Resistance One) on Friday OX (Jan 15). Last three trading sessions, nastiest since prior March 9th lows, while producing a slightly higher volumes, pushed SPX down to MS1 Level (Monthly Support One). Our CI Indicator turned south sharply. No index was spared.
Vols spiked. VXO hit +4 sigma. The intensity is worse than late October sell-off, and yet the McClellan Oscillator readings are higher than October lows. IMHO, the selling has just begun. Mid-day Friday, I posted this on Twitter: http://www.twitlonger.com/show/4q85g
Our coveted SP1 Indicator broke its rising trendline as SPX went thru its -2 sigma band and its MoMo brethren reached a short-term oversold condition.
Bottom-Line: We should be nearing a short-term oversold condition culminating in a dead-cat bounce. Tape feels HEAVY. What is next could be very nasty for our fragile jobless recovery. Not sure PPT can do anything about this one.