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Bearish Charts in Equities About to Be Joined by Bearish Developments in Bonds and Currencies


We are just on the verge of additional breakdowns in some of the important "risk tell" charts in the bond and currency markets.


Advancers vs. decliners: Neutral / Bearish. The uptrend line for the advance / decline line has been broken several times now – making it a non-factor going forward. As long as we see the continued patter of lower highs and lower lows, the market has to be considered in a technically weak position.

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Net New Highs vs. Lows: Bearish. Notice on the upper graph on the chart below that the new new highs / lows are still solidly below its uptrend line and continuing to set lower highs and lower lows. Notice also the downside break of the uptrend line in the SPY (lower graph on the chart).

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CBOE Volatility Index: Bearish. This just turned from neutral to bearish. The weekly chart of the VIX is shown below. Notice that with today's trading, the VIX is trading above the long-term downtrend line. If we see a weekly close above that line, it will confirm the newly bearish stance of this indicator.

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Now on to the bond and currency markets!
No positions in stocks mentioned.

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