While the “bounce” exceeded previous expectation levels, due to a greater
impact of short covering than anticipated, the rise did allow for portfolios to be realigned fully with our target allocation model. However, did this short term rally reverse the intermediate term “confirmed sell signal” issued two weeks ago? The chart on the next page shows the market versus the confirming
buy/sell signal.

What is important to notice is that following the previous selloff in the market – stocks reached a new closing high as they entered overbought territory. This followed a 110 point rally in the index. From that point to the next closing peak was only 40 points. However, NO SELL SIGNAL was ever issued.

…..read it all HERE