The early detection of structural weakness has now led to full blown price breakdown on the index and many of its constituents on the daily charts.
Most weekly charts are still OK, but dailies are just brutal.
We knew what was likely to come. In a premium post of May 14, I wrote this to readers of my premium content as only one possible way of thinking about and dealing with risk:
How many would have like to have done something like that at the very least that early into this correction/decline?
MAI and OEW are not the only proprietary indicators that I deploy daily to monitor the health and strength of the market. I also do a stage analysis of 5 US indexes via my own proprietary algorithm that is based on Stage Analysis methodology of Stan Weinstein
Currently, the stages of US indexes look like this
Looking back across my daily recording of stages at Market Time Premium, I see that S&P daily stage turned into Strong Decline on June 3
It had first turned into distribution on May 17
Market players have been puking risk assets all over the place. How many would have liked to have taken at least some defensive measure on May 17, or 20, or 23. How many would have like to be in full defensive mode on June 3?
Many if not all who are stuck with long positions, I think. But how could they know things would get this far down?
Well, we knew things were looking weak internally and structurally. I even made some posts here and talked about structural weakness.
We also could see on a daily basis how market stages were changing from advance to distribution to decline
All of this we knew using three indicators (MAI, OEW, Market Stage Table)
Stages and price structure are not to be trifled with as far as I am concerned
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