Today's decline was pretty well forecast by my little friend the RSI2 in all 4 of the ETF basket, as they all rolled over on Friday . Just a quick gander at these four charts should provide a compelling argument for following this indicator and justify its merit in several of the BZB dirty dozen systems.
The IWM and XLE appear to be most prone to further decline based on their distance from the lower LR30 channel already hit by the Qs and XLF. This doesn't mean that the Qs and XLF aren't subject to further decline, but rather that the IWM and XLE are probably more prone.
Coupled with the RSI, the LR30 has done of great job of providing tradable support and resistance levels for the past two months and deserves to be monitored seriously by swing traders.
With the LR11 now downslope in all 4 ETFs and a wave of selling expected in December as the commercials dump losers and rebalance portfolios, swing traders favoring the long side should be wary that once the lower LR30 channel gets crossed, the next decisive action may be kissing the channel good-bye to the downside. This prospect is supported by the fact that RSI2 has a ways to go before oversold conditions develop again.
All four of the basket are now in confirmed downtrend per the LR30 studies.