First thing I want to mention is that with the exception of the Small Cap index ($DWCPF), we got are second warning for a trend reversal on the S&P, NASDAQ, DOW 30 , and the European index. The Dow 30 actually gave a 3rd warning and the European index, well that is another story. If you have money in the I-fund or European index you have been warned 4 times that a reversal is in the cards, so be careful. So with all this information, why would I say in the title of this article. or is it? In a word, “POMO”.
What is POMO? POMO stands for permanent open market operations by the US federal Reserve Board. Starting tomorrow, the Fed will be in the market 10 days in row pumping money into the market. Each one of these days they will be spending 6-8 billion a day except for two and on those days it is just a measly 1-2 billion. This can stop a downtrend in it’s tracks and I would hate to bet against the Fed.
So with this information, I’m going to have to stay in the market at least through Monday or Tuesday to see if the Fed can reverse all these warnings signs and turn them into Green. Do not fight the Fed and it’s deep pockets. That is why I was buying personal stocks for my portfolio today and not standing down. Below you will find all the charts for each market to show the confirming warning signs. Normally I would recommend bailing out, but after watching the power of the FED in September and October, I will disregard the signs for now..
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