Unless the market reverses immediately the TD Combo 13 “sell” signal will be invalidated on this chart. Additionally, the Beta-X trendline is no longer acting as resistance to the price action.
However, the technicals associated with this chart are not promising for the longer run; at least for the moment. Note that even though price is now at its highest closing level, both the RSI (top pane) and Composite Index (middle pane) are not confirming. Of course, a continued rally may work off these divergences. We’ll have to see if that happens before price turns down again.
Bottom Line: I have been thinking that the May high will hold and that we are in the initial stages of a new equity bear market. Any move above the May high will prove me wrong although I would still believe that the risk of being a long-term equities investor here would be extremely high.
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