Today’s Daily Angle comes from Wikinvest Wire member StockTradingToGo. You can read the full article on the Stock Trading to Go blog.

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View the full INDEX:VIX chart at Wikinvest

Done, finished! Any investor who is buying into this market dip thinking that the next 4 – 6 weeks are going to be up up and away needs to drop back down to earth. The S&P 500’s close under the 50 day moving average is the last brick in the bulls wall of support.

Some fun facts for you to consider:

• Out of the last nine trading sessions on the S&P 500, six have been distribution or heavy distribution days.
• Bye bye 20 day moving average support.
• Bye bye 50 day moving average support.
• There were 9 stocks down for every 1 up in last Monday’s heavy volume session.

A great chart by Dave Singer also shows the massive rising wedge that has been forming (Note chart is of the Dow Jones and is from this past Tuesday, October 27th):

Dave Singer’s Technical Chart (click to enlarge)

These rising wedges are traditionally very bearish and this time around is no exception. It is hard to tell if the Dow closed out of this wedge formation as of last week’s close so keep a close eye on this potential formation breakdown.

Also, check out the Volatility Index at the top of this article which has spiked nearly 30% in the last four sessions.

I want to clarify that I am simply calling the rally since March as over and that we can see downside pressure for the short term, 4 – 6 weeks max. If we see the rising wedge collapse to the downside, MACD confirmation, etc. then that may turn this retracement into a different scenario with darker possibilities.

Overall though cash is back to being king. In fact I am back in 100% cash as of last week. Last time I went 100% cash was back in August of last year and we all know what happened after that.

Stay smart out there!