VIX made a 79.6% retracement of its rally from its Master Cycle low.The next rally may take out  Cycle Top resistance at 20.99, giving the VIX a probable buy signal.The Cycles Model now indicates that the rally may continue for up to two more weeks.   

The NYSE Hi-Lo Index closed just beneath its mid-Cycle resistance today at 85.17.A close beneath the trendline at 50 gives the Hi-Lo a sell signal while a new low (below -154.00) confirms it.

(OfTwoMinds)The percentage of household assets invested in stocks fell from almost 40% in 1969 to a mere 13% in 1982, after thirteen years of grinding losses.

The conventional wisdom of financial advisors–to save money and invest it in stocks and bonds “for the long haul”–a “buy and hold” strategy that has functioned as the default setting of financial planning for the past 60 years–may well be disastrously wrong for the next decade.

This “buy and hold” strategy is based on a very large and unspoken assumption: that every asset bubble that pops will be replaced by an even bigger (and therefore more profitable) bubble if we just wait a few years.

SPX challenged the lower trendline of the Broadening Wedge formation, then rallied toward the 50-day Moving Average. Today it closed beneath the 50-day Moving Average where it has spent two days in a consolidation.The SPX remains on a confirmed sell signal.Fractal analysis and the Broadening Wedge formation both suggest proposed targets beneath Cycle Bottom support at 2336.55.However, crossing the blue trendline at 2675.00 implies a larger decline to 1800.00 is possible.

(USNews)”What does it mean for trade?” That question continued to guide Wall Street Wednesday, leading stocks to a mixed finish after President Donald Trump’s top economic adviser resigned after opposing the administration’s planned tariffs on imports of steel and aluminum.

Stocks fell in the morning as investors reacted to the departure of Gary Cohn, a former Goldman Sachs executive who was seen as a proponent of free trade. The losses deepened after Trump suggested on Twitter that the U.S. may impose penalties on China as part of intellectual property disputes. The Dow Jones industrial average fell as much as 349 points.

NDX rallied within 35 points of its Cycle Top this afternoon.  While not yet on a sell signal, the lower highs suggest a probable turn down is likely.A decline beneath Intermediate-term support at 6791.54 and the nearby trendline at 6775.00 may trigger a sell signal.Note that two different chart patterns may share the same trendline.

(Bloomberg)The U.S. tech heavyweights, for months seen as an indestructible monolith that doesn’t go anywhere but to the sky, are starting to show some cracks in the foundation.

Case in point: this year’s performance of the FAANG group of Facebook Inc., Amazon.com Inc., Apple Inc., Netflix Inc. and Google parent Alphabet Inc.

As a whole, the group is still outperforming the market. But upon closer inspection, there’s a performance gap between the index’s winners and losers not seen since 2015. 

The High Yield Bond Index appears to have lost its upward momentum as it made a lower low this week. A decline beneath mid-Cycle support at 182.97 may result in a panic, since there is no visible technical support down to the Cycle Bottom at 160.23. 

(CNBC) Several interesting themes have emerged from the bond market recently, most notably in high-yield bonds.

One high-yield corporate bond exchange-traded fund, the HYG, has made some concerning bearish moves lately. Of course, the direction of the high-yield market is much more connected with the stock market than that of investment-grade corporate bonds, so this recent action is of concern to me.

Specifically, I’m watching the high-yield market’s substantial underperformance relative to stocks since last summer.

UST may be running out of time to complete its bounce from its Trading Cycle low on February 21.The bounce has tested Cycle Bottom resistance and was repelled.There may only be a few days left to complete this retracement, if a further rally is on deck.Otherwise, the Cycles Model suggests the waterfall decline may resume through late March once the bounce is complete.