Are we loving this market yet? 

Whether you are long or you are short, your nerves are fried. I’ve been both during the down turn, and both sides of the trade have their moments of difficultly and frustration. But now that the market has dramatically sold off, where do we currently stand in this market? 

Do we crash? 

Do we bounce? 

One thing for sure, with the huge increase in volatility, I highly doubt we stay where we are. 

So let’s take a look at the SharePlanner Reversal Indicator.

On the daily chart you have a very overextend market overlayed on a flat lined reversal line that could flash the bullish reversal any day now.

Here’s the Daily SPRI:

SharePlanner Reversal Indicator Daily 10-16-14

On the weekly SPRI you have a similar setup – both the daily and the weekly are at the cusp of flashing a bullish reversal, and as we have seen in the past when they flash the same signal at the same time that is when the move is the most powerful and most reliable. 

Here’s the Weekly SPRI:

SharePlanner Reversal Indicator Weekly 10-16-14a

 

With the S&P 500 at some extreme lows, with the % of stocks trading above their 40-day moving average at extreme lows, the potential to see a bullish reversal on the SharePlanner Reversal Indicator is very, very strong. 

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