Setting a New Downside Target

An important breakdown! The bottom of the consolidation that had been in effect since the end of last year was at about 1823. On Monday, the markets looked very soft, and even though the underlying confidence, as reflected by the volatility index (VIX), remained high, the slide was enough to penetrate that support. That makes the next downside target about 1795. 

Moreover, the second chart below carries a warning that the decline could go deeper. The 55-day Arms Index is very overbought, and that serves as a more lasting and important signal....229 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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