SP 500 Technical Chart review (revisited)

Thought I might include portions of a post I placed today on the TZA thread because I think it clearly explains what the market is facing right now.

Pay particular attention to the SPX Weekly chart with 100 Week MA and the MACD indicator, current and past and how the market has reacted after the Weekly MACD has gone negative on the weekly chart.

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We'll also need to look for a reverse H&S formation developing, as it did at the previous March, 2009 low.

For the SPX to avoid forming a reverse H&S reversal pattern, we need it to break previous lows.

SP 500 weekly chart w/100 week MA

As you can see from the above weekly chart, the SPX got rejected EXACTLY at the 100 Week MA with a shooting star candlestick (inverted hammer). That's not good.

Candlestick charting reference

It also put in the 3rd upside prong of a revised downward channel for Technicians to draw channel lines through.

And if you look at that chart from that 10 year perspective, it resembles a HUGE BEAR FLAG.

Bear Flag chart formation

But most importantly, look at the Weekly MACD. It's negative.. So backtest the chart and look for previous instances where the market has suddenly rallied to the upside and pulled that weekly MACD back to the positive WITHOUT A MAJOR PLUNGE OCCURRING FIRST..

Can't find any? Neither could I.

Look again.. Use "All data" as Time period.

Still can't find any? Neither could I.

It's clear that when the SPX Weekly MACD breaks to the negative, it has ALWAYS plunged to clear oversold conditions PRIOR to any recovery.

EDIT: I just reviewed this article from DecisionPoint.com (see my link list). They have issued a long-term sell signal on the markets:

DecisionPoint issues long-term sell signal

4-Year Cycle Ambiguity

Stay long this market at your own financial risk. Go to cash and wait for the "Smart/Big Money" to come back in and support the markets as they did in March, 2009.

Or if you're patient enough and can handle the volatility of the inverse market ETFs, buy a position in them to profit from the market turmoil.

Scrutinizer