The Vix system, which alerted us to a 100+ SPX points drop two weeks ago gave a long signal capturing a 30 point move to the upside:
Chart courtesy of OddsTrader
The weekly market breadth indicator is no longer overbought and has droped to levels which precede sustained upside moves in the market:
Despite the obvious uncertainties regarding a deal being struck on time in Washington, there are a few other troubling signs remaining. During the recent sell-off, SPY and SPX broke below the ascending channel in effect since November '12, which puts us on a ascending wedge watch:
While the SPX and the DJIA have plenty of wiggle room to the upside, the Russell 2000 index should be the first one to signal whether bulls remain firmly in control by leading the charge to new highs:
GLD and SLV continue to be under pressure, with GLD taking a big hit on Friday and losing the 50% retracement level once again:
