The TrendFlex Classic CR (“Credit Risk”) indicator is a short-term measure of the risk of a change in the trend of the S&P 500. We follow this indicator versus a moving average line and note Buy and Sell signals as the indicator crossed up (Buy) or down (Sell) through its moving average.
As the S&P 500 has seen increased volatility while consolidating its recent gains, the TrendFlex CR indicator is close to breaching its moving average to the downside, a bearish development. The signal tends to lead equities price movement, so we take this development as another caution sign for equities.
Although the intermediate-term trend clearly is up, the risk of a short-term trend change appears to have increased. See the chart below: