As per recent postings, the weekly chart completed a perfected sell setup two weeks ago. This signal is supported by the monthly chart (see the January 9th post for details). Keep in mind that after a perfected setup has occurred the market ‘usually’ experiences a trend reversal, correction, or consolidation within four price bars of bar #9. That has certainly happened!But … we did not go short due to the REI indicator being in an extreme overbought situation. That condition has now been alleviated and the REI is back below .45 (see chart). If we now get a bounce in the market that pushes the REI back above .45 we will once again be in a position to enter on the short side.
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