For the "IF" in life

As can be seen in the image below the there was a corrective sell off today that began with a gap to the downside and did not stop but kept on going down. Several areas of support were broken and the sell off was hard enough to change the sentiment of both the short and intermediate term sentiment to bearish as seen by the background color of pink on the 60 min, 240 min, and Daily charts. As mentioned in my previous post we had got to a weekly 5th wave high in the charts and the outlook is for a corrective move of either A) consolidation, or B) a trend reversal. We are not alone in the world and global conditions can influence our markets. Click on image to enlarge.

Applying the same methodology for trend analysis as I have done in the SPY image above I applied it to the FXI below which I use as a proxy for China. As can be seen by the background color of pink in the 60 min, 240 min, Daily, and Weekly charts China is bearish in all time frames and that is a bad sign. This chart was actually leading to the downside by about a week before the SPY began its move to the downside. Click on image to enlarge.