A Downward Swing Begins

We may have seen the cycle high in the two-month bottom-to-bottom cycle last week. It was projected for late September, and we are almost there. That would suggest a down move lasting to late October. The weakness on Friday and Monday was enough to break the steepest uptrend line. Moreover, the Arms Index moving averages had been overbought and still are on a longer-term basis, although the shorter-term ones have moderated.

The second chart below gives us the volatility index (VIX) with an inverted price scale. It shows that the complacency has again come into the markets. Experience tells us that such a lack of fear is usually seen on market highs....245 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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