Wednesday, May 26, 2010

Bear Market Resumes???

Please take a moment to look at the Weekly SPX chart above. This chart has been a great precursor to the market direction and as you can see from the circles marked on it, it has been pretty reliable. There are two proprietary indicators that i have developed in the last 2 years that have worked pretty well in predicting long term direction of the market.

If we take BOTH indicators together, the reliability factor zooms even further. This chart has for the FIRST time since march 09 rally, has given a Long term SELL signal. The upper indicator is racing down even faster. This adds credibility to the lower indicator, which is the primary indicator. Now, BOTH of them are in SELL mode.

As you can see, each time this indicator went to 1/-1, trend changed. If the upper indicator too accompanied properly, then we have winner on hand.

This indicator does NOT give targets. It just provides cues to market direction. Currently we have a clear SELL signal.

What does this even mean?

In short it means, if you buy put options or short stocks and come back in say 4-5 weeks or few months, chances are that you will be GREEN by huge margins. Probability of this thing going against you is extremely low as you can see from the chart yourself.

As always, take what it is worth at the face value of it. :-)

Good luck.
blog comments powered by Disqus