Odds favor a continuation of the sell off.....

This coming week will see the end of May. As we approach the summer months the market looks like it is ready to roll over and do some major damage to your investment accounts. The start of the week will be interesting as the "Momo's" are reacting (pre-markets) to the supposed good news from Greece and the bulls may get an early lift on Tuesday. Later in the week, reality should set in once again and the bears may gain control.

Here's a chart of the SP500 (weekly) and  as you can see it is signalling a top, either intermediate or longer term, is forming, The indicators in the lower windows are arranged from top to bottom for their signals. The early signal in red has already triggered a sell signal as has the intermediate indicator in the middle window. The last signal was given this week on the longer term indicator. We may get a bounce here and there but the down side seems to be the direction going into summer. The 1150-1125 area is the first area of interest. A break below 1292 is key.

Keep your eyes on the VIX. It is starting to move up but has a long way to go before a major bottom forms. (Remember the VIX is inverted to price action and a peak is a bottom) The chart to the right is a monthly snap shot of the current action. People are not taking the European problems very seriously and it will really catch them off guard when the bottom falls out.




Here's an updated monthly chart showing the SP500 and we have a mixed bag on the indicators. We have some that are showing a divergence is taking place with price and some of the longer term indicators are just starting to top. Given where we are on the daily and weekly signals we are looking for confirmation on the monthly very soon.

There is an old saying that goes like this "It doesn't matter until it matters" and then it's usually to late to do anything about it. People tend to get complacent about global issues because it doesn't seem to be affecting them until it blows up. Now is the time to get prepared with your plan of what to do when things begin to change.