As of this morning, the Asbury 6 has turned Negative from Positive on February 2nd. Our other Tactical indicator, however, the Correction Protection Model (CPM), still retains a Risk On bias. We interpret these conflicting signals as an indication that the market is at a Tactical decision point, from which its next directional move — either up to resume its November 2020 advance or down to start a corrective decline — is likely to begin.
When these Tactical decision points becoming apparent, we attach them to an underlying support level on the benchmark S&P 500 (SPX) chart. Chart 1 below shows that, in this instance, that support level is at 3805 to 3774. It represents the 50-day moving average (solid blue line) and the March 2020 uptrend (dashed red) line, and it is currently being tested.
Chart 1
From here, one of two things can happen:
- SPX can hold 3805 to 3774 support while the Asbury 6 turns back to Positive. This would indicate that the November uptrend has resumed, just as it previously did from the Jan 29th low, or
- SPX can decline below 3805 to 3774 support while CPM turns to Risk Off. This would indicate that an overdue corrective decline has begun.
Until one of the two occur, however, we do not consider yesterday’s shift to Negative in the Asbury 6 as being actionable. At least not yet. At this point, the newly-Negative “A6” is simply a signal to attach an underlying support level to it — 3805 to 3774 — and to watch and wait.