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Reasons Why Yesterday Signals a Trend Change

By Ilene
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Financial Ninja Ben believes a trend change may be forthcoming. Here’s why.

Reasons Why Yesterday Signals a Trend Change

Courtesy of The Financial Ninja

[click on charts for sharper images] 

 
Reasons why the sell off yesterday was not just a profit taking correction, but a trend change.

1) Yesterday was a Major Distribution Day. When this occurs AFTER a large, long rally it signals a trend change.

2) After a big decline in volatility (VIX) the sell off was confirmed by a 15% spike in the VIX.

3) The US dollar index (USD) strengthened, clearing resistance and is now above both the 20 and 50 day EMAs. A strengthening dollar represents a flight to safety and foreshadows weakness in equities.

After all, the market is The Most Overbought Market in at Least 23 Years.

 

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