"Typically, when markets have three up-closes and do move that quickly, that's a sign of a termination of a short term move. And instead of looking forward and expecting the market to move higher, the market could have a very sharp decline. So we're looking closely at tomorrow and Friday morning" (jobs report).
"What typically happens if you see three up-closes off a low, you'll see a vacuum in the market, and that vacuum will accent the decline even more than the upside."
I don't follow his indicators on a daily basis (requires subscription), but it appears that when his indicators generate daily, weekly and monthly 13 signals, like they did in February, it confirms that the trend is severely exhausted and money can be made fading it. DeMark said the S&P 500 generated a "13 that coincided with a daily low" on Tuesday. Watch the Bloomberg video after the jump. Interesting technical analysis.
"At the May 2 high, when the market doubled the move from the March 2009 low, there was a confluence of daily, monthly and weekly indications from our market model. They all produced what is called the sequential and combo 13s, and that told us to aggressively go short. What we've experienced yesterday with the S&P average, as well as other markets, was a 13 that coincided with a daily low. So we're really going against the trend right now."
U.S. Stocks May Rally 30% on DeMark Buy Sign: Technical Analysis (BloombergBusinessweek)
Fibonacci Shows S&P May Hit 1,020: Technical Analysis (BloombergBusinessweek)