1 TRADING ART HILL

[TREND1]

1/23 What Makes this Wedge Break Significant?

I ignore bearish setups when the bigger trend is up. Conversely, I do not ignore bearish setups when the bigger trend is down. And I think the bigger trend is down for the S&P 500, S&P Mid-Cap 400 and S&P Small-Cap 600. The S&P 500 is below its 200-day SMA, the current advance did not break the early December high and the 50-day SMA is below the 200-day SMA. Despite the bullish breadth thrust in mid January, the other breadth indicators I follow are bearish. Short-term, the chart below shows CCI moving below 100 for the third time in three months.


https://d.stockcharts.com/img/articles/2019/01/154826493539991230711.png

I am getting short-term bearish signals and this argues for further weakness in stocks. As with any signal, I have no idea if it will work or how good it might work. These signals could just lead to choppy trading and volatility - welcome to bear market environments. All signals are equal in my book. They work until proven otherwise or a profit target is reached. At this point, a close above 2675 in $SPX would argue for a re-assessment.