The S&P 500 hit two major points today

The S&P 500 hit two major points today.  The first major point was hit this morning when we had a test of the 50 day moving average at 1300.18 in the Futures. 1300.25 was the low of the day and the 50 day moving average held with ease.  Once the low of the day in the Futures was the 50 day moving average, all eyes shifted to the second major point; the down trend for the year at 1314.50.  The market then grinded up the rest of the day looking to test the down trend.  The market not only violated the down trend, it closed above the down trend.  The bulls are in full control.  They got everything that they wanted today, even the VIX closed back below its 50 day moving average.  From here I am looking for the market to test the highs for the year.  Thursday is the end of the quarter and the highs of the year at 1337.75 could be tested by then.  I included a copy of today's morning brief.
Morning Brief3-29

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Morning Brief March 15th

Morning Brief3-15


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S&P confirms with VIX that a correction has started.

This is a follow up to  to my last post.  At that time I noticed the VIX  was signaling that a correction was coming in the S&P.  I believe that today the S&P confirmed with the VIX that the correction has now officially started.  I have a feeling that there will be institutional and hedge fund selling now coming into the market.  I believe this because we have broken a major trend line and this is the first time we have been below the 50 day moving average since Sep. 1, 2010.  The question is where do we go from here?  Last time we had a violation of the up trend in the S&P it had a 120.89 point break the following week.  Last time the VIX violated its down trend it rallied 19.62 the following week.   Also noting that the MACD could soon turn negative in the S&P and the VIX MACD is already positive.  All that I know is today's action was very bearish and the buying has finally seemed to stop.   The down volume today was 88% of the up + down volume.  That is not good.  Looking at the charts I believe that next week could be a wild one.
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Is the VIX signaling a correction in the S&P?

The VIX is telling me that the S&P is on its way to violating the current up trend starting a correction.  I say this because when I look back to Feb. 1st 2010 the S&P started an up trend and the VIX started a down trend.  The VIX ended up making a low at 15.23, from there the VIX began to rally and then violated its down trend.  The S&P then followed by violating its up trend.  The VIX triggered the start of the correction in the S&P.  The recent low in the VIX was 15.22 and now has violated the down trend.  Repeating the same pattern made from April - May 2010.  I now wait to see if the S&P confirms by violating its current up trend.
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March Outlook

As of today the S&P, Dow and Nasdaq are all up about 4% YTD.  The Indices are all moving at about the same pace.  The leader to the upside has been the Nasdaq but as of late the Nasdaq has struggled more than the Dow and the S&P.  The Nasdaq is usually the leader of the market in terms of percentages.  They usually outperform to the upside and exaggerates the downside.  Which ever way the Nasdaq starts to head this month the other two markets will probably follow.  The bulls have a thorn in their side  and that is Crude Oil.  Now that Crude Oil is comfortably above 100 I believe that is a problem for stocks.  If Crude continues on its run we will probably start to fall.  The other factor in the market that I believe could hurt stocks is that Gold made new highs for the year.  Gold opened this year on its high and was down about 7% at one time only to rally back and now go higher for the year.  I believe this is a problem for stocks because high Gold prices tell us that there is still fear in the market.  Aside from all the issues that are bad for the stock market the tape itself is not telling you to be worried if you are long.  I believe that the recent move down in equities has held areas of importance.  I watch the 50 day moving average because so many funds and institutions watch this average.  It becomes a big pivot for the market just because so many eyes are on it.  As of right know that moving average is 1293.54 and we are holding an up trend from Sep. 2010.  Failure at this trend line should result in a test of the 50 day moving average and that is where the market will show its true colors.  The rest of this month I will be listening to news in the Middle East and the price of Crude Oil, but I will also be focusing my attention as to whether or not we get a Dow Theory confirmation to the downside.  The Dow Jones Transports are well below their 50 day moving average and have confirmed to be in bear territory but the Dow Jones Industrials have not yet confirmed. A Dow Theory confirmation would change the trend of the primary market from bullish to bearish.  The DJI has to close below 11823.7 to confirm Dow Theory.  If this happens I believe that this will pull all Indices lower and the correction that is widely talked about will begin.  Until then and only until then will I become a bear in this market.  I will be eagerly waiting to see what happens.  I have attached some charts below to show you what I have been talking about.  I hope everyone has a great month.  Thanks, Anthony (DELI)
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