The ES/SPX has been whipsaw hell in the last few days, but it sure looks like a top is forming (or in place). The Vindicator Buy/Sell measures buying and selling pressure using advance/decline and volume statistics, and it's telling a very interesting story. Up until last Thursday the bulls were clearly in control as evidenced by buying pressure (green line in chart) staying solidly above selling pressure (red). However, starting last Thursday the buying and selling pressure began to oscillate, which is typical for this indicator at market turns. In this case it is evidence that the bulls have lost control and the market is ripe for a decline. As with any technical analysis tool the Vindicator is not foolproof, so it is possible for the bulls to regain there grip. If there is a sell-off, the big question is what severity it will have.
Another sell signal today, third one since last Thursday. The prior two were negated by little mini rallies, so it's been frustrating. However, the intraday (5 minute bars) ES chart of today's decline is showing a very clear 5 wave impulse down, so it looks encouraging. I'm planning a short ES move, but the ES/SPX is quite oversold at this point so I'm hoping to catch it on a bounce over the next day.
