T2108 Status: 63.3%
T2107 Status: 51.6%
VIX Status: 14.0
General (Short-term) Trading Call: Hold (bullish positions); aggressive bears can short with a tight stop at fresh all-time highs
Active T2108 periods: Day #21 over 20%, Day #19 over 30%, Day #16 over 40%, Day #14 over 50%, Day #9 over 60% (overperiod), Day #91 under 70% (underperiod)
Reference Charts (click for view of last 6 months from Stockcharts.com):
S&P 500 or SPY
SDS (ProShares UltraShort S&P500)
U.S. Dollar Index (volatility index)
EEM (iShares MSCI Emerging Markets)
VIX (volatility index)
VXX (iPath S&P 500 VIX Short-Term Futures ETN)
EWG (iShares MSCI Germany Index Fund)
CAT (Caterpillar).
Commentary
The wait for a resolution between the forces of a bearish divergence and a bullish coiled spring continue even as the S&P 500 (SPY) continues making very marginal closing all-time highs.
A fifth straight day of essentially going nowhere
T2108 however, is sagging a bit. Today, it slipped slightly again to close at 63.3%. This continues a slight (bearish) divergence from the S&P 500. The volatility index, the VIX, is marginally adding to the bearish interpretation of the divergence as it continues to creep higher during this period; note however that the VIX gapped up and faded today.
This all leaves us in a wait and see mode. Perhaps Apple (AAPL) holds the key to resolution.
Apple’s stock printed an ominous blow-off pattern today with a gain as much as 0.8% when it hit a fresh all-time intraday high of $115.09. If AAPL continues selling off from here, traders should assume a top is firmly in place with a 50DMA retest in play. Such a move would remove an important partner in the bullish interpretation of the market action. Two important caveats: 1) the daily chart seems to have a poor print with the high going over $117 – I used the intraday chart to get the true high; 2) volume was below average and even below some of the recent buying – a blow-off top is much more convincing when volume surges because it more closely signals the potential last gasp of buyers and the exhaustion of buying power.
