Tuesday, December 13, 2011

Several Sell Signals

The SPX daily chart has generated several sell signals from each indicator shown above. The 20 day moving average has now produced a bearish cross of the 50 day moving average. There are 6 different phases based on the arrangement of the moving averages that categorize price. Today has officially shifted price in what is known as the Bearish Phase. The Bearish phase occurs when the 20day is below the 50day and both are below the 200 day. In the Bearish Phase, sellers are in control and prices decline with the moving averages acting as resistance to any short-term contratrends. It is key to note that the RSI penetrated 50, which acts as the dividing line for Bulls and Bears. A Break below 50 shifts the market to a bearish sentiment. During Bear Markets, the RSI usually contains rallies or contratrends in the low to mid 60 level. Yesterday I  posted the shift in momentum would need a confirming close of the day's candlestick at 1227.25. Today the SPX closed at 1225.73 which officially shifts momemtum and validating the successive lower histogram bars produced. Stick around as I will have more to post tonight.

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