I still believe the SP-500 is in a flat or extended flat pattern for the green fourth wave before another thrust higher. The index is still within it's red upward channel and should find a low near 1627 or 1597. All daily indicators went on sell Monday, September 23rd and have stayed on sell up to tonight. There hasn't been much downward pressure on the market, but I am watching a few other indicators to get a sense of what's going on.
The MACD on the SP-500 is still in a downtrend, and will only give a buy signal once it breaks above that line. As you can see from the chart, the MACD is far from being oversold with larger corrections dropping below the -8.00 line and put in a triple negative divergence on it's last high, which is extremely bearish. We need a large move to the downside, and soon, for the SP-500 to maintain downtrend status.
The same negative divergence showed up on the EWOsc, and like the MACD, which this indcator is based off anyway, it too is far from oversold. In fact, it has yet to even cross the zero line.
The RSI is getting close to oversold, but more often than not, after crossing below the 30 green line level, the market will produce a lower level with positive divergence. We should not look buy until that happens or we get a buy signal across the other indicators.
The StochRSI is still within it's downtrend channel and has finally reached the bearish zone, where it will reside until the market should be bought. The buy signals come from breaking over the downtrend line AND breaking above the "Bullish Above" line near 40. Again, we need to watch how all indicators are acting at that time.
The ADX is showing the whipsaw range of the market. The last 4 signals have not reached the yellow caution line on the chart, but buying or selling the rollover is still working. The -DI is still above the +DI but one day can change that. The ADX is showing NO TREND being under the white line at 20. When the ADX reaches these low levels it means a big move is coming soon. To take advantage of that move we watch the DI's once the ADX starts making higher levels. If the -DI is still above the +DI after two consecutive uptick days in the ADX we sell the market, if the +DI rises above the -DI after two consecutive uptick days in the ADX we buy the market. I will be watching and keeping you posted.
The BPSPX gave it's first red bar on the Renko chart today. The previous red bars are shown with the vertical blue lines on the chart.
The current markets conditions are mixed. Per the previous signal we should be short from September 23rd, but the downward action is less than stellar. It is prudent to preserve capital while the market whipsaws until we have a clearer view of what it wants to do.
If you're short, I would maintain the short position. If you have no position I would sit on my hands. If you're long, your odds of being correct are less than 50%.
