Composite Help crossed below zero on Wednesday and continued deeper in yesterday’s session, states Ian Murphy of MurphyTrading.com.
This leading market indicator has an excellent track record of flagging moves in the S&P 500 (SPX). It doesn’t always work, but works enough times to make one sit up and take notice. In that context, yesterday’s positive price bar and close on the S&P 500 was surprising.
Overnight, futures appear to have received the memo and started selling off when European traders hit the screens at around 04:00 ET. The S&P, Dow, and Russell are down, but the Nasdaq is holding its ground.
The Help Strategy is setting up for another trigger, as both indicators have left the channel and the CBOE SPX Volatility Index (VIX) is rising (black arrows). The current trade is still open, but the stop may be hit in today’s session when the market opens in a little over 30 minutes.
Learn more about Ian Murphy at MurphyTrading.com.