Saturday, March 19, 2016

A Top is Very Near

On March 5 using  the Students Trifecta Model (VXV/VIX, SPXA50R/SPXA150R, and TRIN/BPSPX), as representative of the overall sentiment picture ... 

I pointed out that
"Bearish sentiment has now declined to about the same level for the SPX as in Oct 2015 when the SPX was about at 2010. At that point we were about three weeks from the Nov top at 2116, So it is possible on sentiment comparisons that we reach SPX 2100, but it is more likely that a top is reached in the 2050-2080 range."  With 2080 the ideal target.

Now, two weeks later, we appear to be only days away from a top with 2080 still the ideal target.

In addition the individual indicators have turned overwhelmingly bearish, the overall reading has gone from +6 net positive on Feb 12 to -10 net negative as of Mar 18, and all three of the composites have turned negative as well.

However, we are likely to see a two month distribution or topping process similar to Nov and Dec of 2015, roughly between 1980 and 2080, before further downside.  The volatility measures VIX put/call and VXX $ volume will likely be the last measures to turn bearish.

Edit: March 22, The reading for SDS/SSO should have been neutral, changing the overall score to a net of -9.  This will be corrected for future reports.  Comparison to Nov 3. 2015 top next weekend.

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