DeMark Indicators Turn Bearish

Tom DeMark is one of the many interesting personalities I've come across during my studies of the market and market indicators. Mr. DeMark literally drew his own charts by hand while developing his own methodologies. He's always worked for large institutions that cannot trade in and out of positions easily, so finding points of exhaustion to go against the trend are absolutely paramount in entering and exited positions. His indicators really help in selling into strength and buying into weakness. His most well known indicator (though not known at all to the retail public, something I personally like) is TD-Sequential. Looking at a daily chart of the S&P E-mini, we can see that completed setups do not occur often, and completed signals even less, but signals in the ES have been very accurate when they do materialize.Which brings us to...

Chart 1: S&P E-mini with DeMark Sequential 

There have been 4 signals in the last year. The first signal which I've label A, occurred literally at the top tick in the e-mini before the flash crash, a nice selling opportunity. The next signal, B, occurred at the bottom of the summer weakness and was not reversed until C, which would have netted you 200 S&P points. Not bad. Signal C did not produce much weakness, but now we have another sell signal, D, occurring in conjunction with a host of other bearish signals. Label E for example, marks the highest reading in momentum in years. Add in the put call ratio, extremes in sentiment surveys, diverging breadth etc. In my opinion the signal shouldn't be ignored.