Three indexes, all did the same thing at once.

Wow, so what is market this trying to tell us? Do we buy at these low entry prices? Everything looks so cheap and it is just screaming, “buy me.” Well not so fast. If everyone is jumping off the bridge are you going to jump to? I tried this trick once before and rode the train down 75% with 4 big name stocks, INTC, MSFT, MRK, and WMT. Great names, all looked so cheap but in the hole I went.

So after this weeks close the S&P500, Small Cap, and the European indexes all created a new lower pivot high which flipped the up trend line into a down trend line. This is pretty amazing and pretty scary at the same time. No one can forecast the future and the market can be very fickled, but my common sense is telling me to stand down and run to cash. This market could turn on dime and run back uphill, but with all the indicators pointing south, I’m not willing to bet on it.

The S&P500 or the SPY, totally cleared the 50 week ma on the downside. She also is 2 points below the first major support point. The RSI is below 50 and pointing south. The next major support comes in at 87 on the SPY or 870 on the S&P500. That is another 15% drop from where we are now and 27% below the last high of 122. I’m not willing to ride it down there to see if it bounces, so I pulled out of the C-Fund today completely.

The Small Cap index, or $DWCPF, is more volatile and swiftly moved down through the 50 week  ma but hasn’t cleared it yet. It closed at 507 and the first support comes in at 492, so we will likely test this and the 50 ma next week. The RSI fell through 50 for the first time since last July. I’m still invested here, but next week I could be bailing here also.

There is nothing new to say about the European index, EFA, other than the down trend has been confirmed. The only good news is that the index seems to boucning off 46 and 45 and maybe it is trying to find support here. I guess in due time we will have the answer. In the mean time, I would not be investing here either.

TSP distribution: F-fund – 50%, S-fund 30%, G-fund 20%