The market is tracking the model again today as they snap-back down into this important SPX 757 magnet.
Sell signals are set up overhead today so that tells me rallies will fail and that provides a good opportunity to get shorter if that’s your intention.
If you do want to get a little shorter and if we do get a bounce up off this 757 magnet, I’d suggest looking for a bounce to the SPX 764 level (which is a newly created intraday magnet established yesterday).
Everyone seems to be focused on the SPX 741 level but remember that that level is insignificant AND WILL FAIL BETWEEN TODAY AND 3-5 according to my model. What’s interesting though is that the BAM model will be anticipating a fast-market move between the 757 and 680 magnets so I would guess that fast-market move will be blamed (by the talking heads) on the fact that the “critical SPX 741 level broke.
The prefect scenario in my work is a fast market move down to SPX 680 between today and 3-5 followed by a rocket-ship short-covering/buying stampede into March 23rd.
I have good news on the potential bullish bottom we’re looking for! My proprietary BAM TRIN model is showing an upside spike in the TRIN (selling pressure) into March 5 so, once again, we have data showing the potential for a capitulation low during the first week of March.
The fact that so many analysts have recently come public calling “the bottom” a few days ago (on 2-23) adds even more credibility to the idea that stocks need to cascade through the November SPX lows into the first week of March.
We WILL be buying (possibly with both hands) if stocks can make lower lows into March 4, 5 though so continue to put your buying lists together.
Remember, the most bearish group I’m currently following is the (on-line) education group and the BAM model expects those stocks to get annihilated into mid-to-late March.
Full report coming soon