Mike's Mid Day Minute is available to members on Monday, Wednesday & Friday evenings, with one article per week available to non-members. Members please login and see "Mike's Mid Day Minute" in the navigation menu towards the top of the page.

Despite Today's Rally, Intermediate Signals Pointing Down!


To put today's upmove in a larger perspective -- certainly larger than my 1-minute or 4-hours chart analytics, let's have a look at my updated weekly pattern and moving average analytics in the cash SPX.

Only twice in the last 11 years (2000 & 2007)  have ALL of my directional moving averages turned down into a negative crossing, which subsequently confirmed that an acute, intermediate-term bear phase was underway.  In 2000, after the downside MA inflection point, the SPX declined from 1380 to 768 (-45%), and in 2007 the SPX declined from 1475 to 666.79 (-55%).

Let's notice that with about 2-1/2 hours remaining in this week's trading, all of my intermediate term directional moving averages are pointed down, with the 13-week MA having crossed beneath the declining 26- and 52-week MAs earlier this month. The 26-week MA also is pointed sharply to the downside, but has not crossed beneath the 52 -week MA just yet.

That said, it seems a fait accompli at today's close or after next Friday's close that a crossing will occur, triggering a completed negative weekly MA sell signal -- the third such signal since 2000 -- and an apparent pre-condition for a potentially very powerful decline.  Or, in the current case, it will mean downside continuation towards the optimal target zones at around 1000, and possibly 800 thereafter.

When I look at this weekly pattern and MA configuration, I must remind myself to avoid getting too caught up in the intraday volatility -- even today's 46 point traverse seems relatively insignificant in the larger scheme of things.

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!