Taking a step back from the intraday fray is important to gain some perspective so every couple of weeks I like to take a look at the longer term charts. Yesterday, I went through the monthly DeMark Sequential (TM) and Combo (TM) charts for the major indexes. What I saw was truly worrisome. Three major market indexes have hit Sequential sell signals and two have even completed the dreaded 9 – 13 – 9 countdown.
The S&P 500 and NYSE will complete a 9 – 13 – 9 countdown this month.
In addition, the NASDAQ has also hit a DeMark 9 and a 13 sell signal in very short succession. A combination of 9 and 13 sell signals usually indicates a high probability of a top.
There’s a high probability that a significant top was formed in February or will be formed in March or April. While they are very rough timing indicators for short term traders, the monthly DeMark signals need to be respected and the 9 – 13 – 9 signals need to be especially heeded.