Monday the indices stalled.
Tuesday they sold off hard.
Ditto for Wednesday.
So far, it’s been a crappie week for the market. This action puts the S&P back to its 50-day moving average. No, this isn’t a line in the sand but paying attention to “da fidy” can help to keep you on the right side of the market.
As I preach, this is a business of clues. And, at the moment the clues aren’t too good:
1. The sector action continues to deteriorate—Plot your Bowtie moving averages and notice how many have “Bowtied” or are rolling over.
2. Most foreign stock markets have rolled over. Look at the Australia, Japan, and Europe.
3. Stick a fork in Bonds—as mentioned a few weeks back.
Is this the end of the world? No, but each day things worsen the more work the market will have to do to get back to the business of banging out new highs.
So what do we do? I wouldn’t sell the farm but you might consider getting it appraised just in case. Seriously, again, it’s not the end of the word but things have got to stabilize—and soon. So again, continue to keep an eye out for a short or two. Regardless of what you do, make sure that you wait for entries. And, rinse and repeat from yesterday: “Letting the ebb and flow of money management and portfolio management is always the best action. If the market continues to slide, then you’ll get triggered on shorts and longs will stop out. If the market rallies, then existing shorts will stop out and you’ll ride out the longs. And, sometimes (but not too often) both can work in spite of the overall market. Believe it or not, predicting market direction is much more difficult than predicting direction in individual stocks.”
Futures are flat to firm pre-market.
Best of luck with your trading today!
Chart show later today! See announcements in the sidebar for a link. The password is the first word on page 155 of “Layman’s.” Email me if the “book’s in the mail.”
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