The BAM-VI, price velocity indicator—which simply gauges the size of the price moves we should expect in the near term—set another NEW RECORD yesterday when it showed the only way it would trigger a buy signal would be if the INDU closed at or below 2075 today and the only way it could trigger a NEW sell signal would be if the INDU close at or above 24,000—YES 24,000! 

Then, today, the indicator set yet another record with a buy number at or below a INDU close of 2450 and a sell signal on a close at or above 25,5000! 

As I said in my email JUST PRIOR to that INDU down 777pt session, forget the numbers, forget how I built the tool, forget that the numbers are “impossible” and simply focus on what it is warning us about. 

The BAM-VI is telling us that the market is stretching out its price range—both intraday and intraweek–and that 1000 pt price swings or even 2000 pt price swings in a single session are not only possible, but VERY PROBABLE as we move forward! 

Magnet levels and overhead sell signals tell me that the bears will win this battle as overhead magnets should restrict upside to about INDU 11,327 (with a very, very, super-slim chance of a short-lived stampede to 12,167 if they have a mini-melt-up) while downside magnets at 6606 and 3971 are patiently waiting to be crashed down into at some point over the coming weeks/months. 

The bottom-line is that bottoming counts ARE NOT complete even on a very temporary basis and since we’ve been short this entire ride—and are willing to give back a bit and get even bigger if they somehow bounce them—I’m voting with the model to remain MAX short.

Full report coming soon