Today the market was very disappointing. It seems the pattern of single up day holds very well, and on the other hand the down days never appear as single day.
Recently it has been tough to write the report. TA assumes the history repeats itself. However the current situations seems the the market is writing the history. So we should keep cautious when using all kinds of TA signals which were accurate in the past. According to very negative NYSE TICK, I believe the market is approaching capitulation, and at least the market might bounce back up in the early morning. However if the market sells off further without any rally, the chance is tomorrow might be a reversal day.
1.0.2 S&P 500 Large Cap Index (Monthly). (it is unbelievably that we have to use the monthly chart for analysis) Today SPX broke out at the down side and formed a new low in 2008, and it seems 2002 low will be tested. SPX closed at 806, which is merely 38 points from 2002 low at 768. If the market doesn't bounce back up tomorrow morning but sells off continuously, the possibility of testing 2002 low and forming a reversal should be very high. Of course, will the market be bottomed out after the reversal? I don't know, follow-through is the key, and recently we don't have it.
0.0.2 SPY Short-term Trading Signals, VIX ENV overbought, NYADV is still on the oversold level while NYMO is very close to oversold. What is important is the TICK, which close is very negative today. It happened four times in this year as marked by green dashed line. If the history repeats itself, tomorrow we may see a big sell off (testing 2002 low?) but the trend may reverse during the day.
Here is the NYSE TICK 30-min chart since Oct 8th. Usually the value of TICK below -1000 is considered to be very negative, and too negative usually means reversal. As marked in green circles on the chart, many negative ticks are often local bottoms. 13th, a big reversal was triggered by a record-breaking TICK. Note that negative ticks below -1000 in recent two days are quite intensive, and are even heavier than the Oct 10th bottom. This is why I say in the beginning of the report, the market is approaching a capitulation according to TICK.
2.8.1 CBOE Options Total Put/Call Ratio. Today CPC is above 1.4. In the past this means the bottom of the market. Of course it may not mean anything for the current situation.
2.0.0 Volatility Index (Daily). VIX is still in the rising wedge. But I don't have any hope on it. It may break out at the up side, instead of at the down side.
3.0.3 20 Year Treasury Bond Fund iShares (TLT Daily). Do you remember the last warning on the yesterday report? Now we know the bond market is accurate. Anyway, TLT is overbought, and the possibility of STO reversal is pretty high.