This is what I wrote last week:

“Here is the S&P500 Index (^GSPC). The Primary Indicator is well below the lower green line. In general, once this happens there are only two instances where traders would reverse positions and go long:

1. If the Primary Indicator makes a higher low. Not the case here.

2. On the second occasion the Secondary Indicator crosses the zero line negative to positive.”

Here’s the chart after last night’s close. The Primary Indicator has turned up but is still below the lower green line so we have to look to the Secondary Indicator.

We see it has made only one zero crossover but, last night, the “raw” red line crossed the smoothed line indicating another short-term down leg is about to begin (either today or early next week). If you follow the system you add more short positions but when the longer term cycles are positive it doesn’t pay to get aggressive.