SevenSentinels.com

Primary Trend: Bear Market/ Intermediate Term: ~Seven Sentinels~ Buy Mode/ Short Term: Down, 100% Cash

To follow up now on our evening analysis from last night...and relate those comments to what has followed and will follow, we had said this with regard to the fast melt down of market internals on Monday and Tuesday:

"Meantime, though, the sharp decline in NYMO of over 100 points in just 3 days (and similarly NAMO down over 90 points) has put all of the Seven Sentinels on very high alert that "THE" Seven Sentinels Sell Signal is, as we say, "closing in". The sudden extreme collapse in breadth over Monday and Tuesday that cratered NYMO and NAMO now looms over this market, so that:

A. Any new highs will almost assuredly be accompanied by negative divergences

B. The readings by individual Sentinels will be relatively weak so that return to negative numbers will come quickly on subsequent decline, and

C. Breadth having faltered sharply once this week will find the downward path ("of least resistance") easy to follow the next time.

At the end of the day today, we had noted that today's news-driven spike has produced what "could be" a head and shoulders top to recent trading. Here is another view with volume {courtesy of Volume Dynamics}. Notice that as is required of a valid H&S pattern, volume is high on the left shoulder, lighter at the head, and lightest on the right shoulder:

All of the above is by way of saying that following any rebound here, the Seven Sentinels Sell Signal is likely to follow quickly."