First Breakdown From A Topping Pattern

 | Aug 24, 2012 01:44AM ET

T2108 Status

: 65.8%
VIX Status: 16.0
General (Short-term) Trading Call: Lock in some profits on longs otherwise hold (assuming bearish positions already in place). Trading bias goes to the bears.

Commentary
On Tuesday, August 21, Federal Reserve Minutes Renew Pressure On Japanese Yen ” for more of my thoughts on implications).

For now, trading is easier for the bears. The HUGE onus is on the buyers to prove that the market’s rally still has steam. Until buying momentum returns, I think the index is susceptible to a swift, multi-day sell-off at any time. Bears have an easy stopping point which is a fresh CLOSE above the intra-day high from two days ago. Until that happens, AND the index follows through, the bias is to fade rallies, especially at natural resistance.

Having said that, recall that the intermediate-term bias remains bullish until the S&P 500 manages to print a lower low. That has happened since the June lows.

Daily T2108 vs the S&P 500
Click chart for extended view with S&P 500 fully scaled vertically (updated at least once a week)

T2108-Daily_Extended

Black line: T2108 (measured on the right); Green line: S&P 500 (for comparative purposes)
Weekly T2108

Be careful out there!

Full disclosure: long SSO puts

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