Today was not a BOW day. Yesterday was a teeny tiny BOW day. So, there has been no impact on my new trial indicator. I also back-tested my indicator for all of 2015 and the results were not good in Q1, ok in Q2 and good in Q3/Q4. So, it needs more testing and tweaking before I give any confident triggers.
One interesting note: SPY closed at 205.34, its 50SMA at 205.33 and its 200SMA at 205.28. All have converged within pennies. SPX closed just below its 50SMA and 200SMA. Dow in between.
Regarding the CY2007 SPX analogy which has generally worked in retrospect for the entire year....from October 11th 2007, SPX fell 5% in 7.5 days and then rose 4% in 7.5 days. From November 3rd 2015, SPX fell 5% in 8.5 days and then rose 4% in 11 days. Very similar with 2015 taking slightly longer.
From there in November 2007, SPX fell 3 days just shy of its previous low, then rose 1 day, fell 4, rose 1 and fell 8 to complete an LDT and rally hard for 2 weeks. There were only a couple strong up days during the 17 trading-day downtrend. Since December 1st 2015, SPX has fallen 5 of 6 days just above the previous SPX 2019 low with 1 great up day.
It appears to me SPX is at the point where it needs to break below 2019 within the next 2-4 days to keep up with the CY2007 analogy even if there is a bounce mixed in. If the CY2015 Nov/Dec downtrend approximates the CY2007 Oct/Nov downtrend, it would fall for another 11 trading days +/- from today. That means the downtrend would last thru next week's Wednesday Fed meeting and Friday OPEX and into pre-Christmas week. I estimated the matching price levels to be 1950ish, 2000+ and then 1900ish followed by a huge 2-week rally which would align with a Santa Claus rally doomed to failure in early January. It would be stupid to trade on this alone, but it offers us 1 potential price plan fitting my other analyses. Good fortune.
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