We have experienced a general breakdown in this indicator which now indicates the markets need some time to reestablish confidence before a n extended move higher can get underway. While I do not expect it to occur a waterfall decline is still possible. Caution is warrented.
Click to Enlarge
A long term view of the market with the MCO and SUM Indexes. We are very oversold on the MCO and should expect a bounce by Tuesday at the latest. The breakdown is severe enough that I believe we need another two weeks to establish a base again before looking for a reliable reversal.