Near Term S&P 500 Decline Likely - Creates A Buy Opportunity

Well, the S&P 500 finally could not maintain the rip roaring run and closed lower than it opened last week, although just barely below by -0.125%.  However, the slope of the intermediate sentiment signal (blue line in Chart 1 below) has turned negative and is indicating that we are likely to see a continuation of a market decline this week.  A pull back in the market is expected and should be bought.  The long term sentiment signal line (green) is still trending positive, but has not crossed zero yet and so we remain in a "Buy" period.  The expected trading range this week, as indicated in Chart 2, is 1,290 to 1,395 or +/-3.89%.  A drop below 1,290 will indicate a significant buy opportunity.

Chart 1: 02/12/2012 S&P 500 Sentiment Chart (click to enlarge)

Chart 2: 02/12/2012 S&P 500 Expected Weekly Range (click to enlarge)