More Threatening Technical Warnings ~ The Risk Averse Alert

Wednesday, June 22, 2011

More Threatening Technical Warnings

The ominous technical configuration of the Volatility Index noted yesterday remained entirely intact today. Adding to concern over the possibility of a substantial sell-off upcoming are a couple other measures, both of which average the NYSE Advance-Decline differential over varied time intervals...


First is the NYSE Advance-Decline differential's 10-day moving average versus its 200-day moving average. Note a remarkably similar setup to October 2008. Yikes!

NYSE McClellan

Next is the NYSE McClellan Summation Index. Having declined since May 1st to the negative side of its range while the Oscillator confirmed every [lower] NYSE high and low along the way, the Summation Index's bounce to zero during the past week's rally raises prospect that, the present moment rather is a decisive one. The fact that the Summation Index now is in a position to challenge its early-July 2010 bottom reveals just how weak are the market's underpinnings, this while major indexes remain at relatively lofty levels.

Whether this sets up an imminent slaughter remains to be seen. For now it is well enough to suppose June 16th bottom likely will be challenged sometime over the next few days.

Yesterday I suggested that, currently ominous indications of further selling ahead might require altering the Elliott wave count for wave (c) from late-June 2010 bottom, such that its end might be thought reached on May 1st. There are other possibilities, as well. For example, wave 4 of (c) still could be forming. Its bottom, then, might be upcoming.

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