Today was painful, but not unexpected.

I didn’t think the move was actually going to happen that fast from my last post 2 days ago, but it happened and it happened as hard as I thought it would. Today’s 1.5% or more drop in the indexes always hurts but it is part of the market cycles. Remember, we never get in at the bottom and we never get out at the top. So sometimes we have to give some back in order to make steady money overall. One day does not make a trend change so if you came here looking for a sell signal, it’s not going to happen. What I will show you is this. If you’re a long term investor, today meant nothing. If you a short term, daily chart watcher, then warnings were fired and moves might have to be made eventually.

I’m not spending to much time here so this is just an update after today’s big move. First chart to the left is the S&P 500 Daily and it fired two warnings in one day. The CBL was broken as was the 50 day moving average. The overall uptrend is still healthy and still intact. We will have to lose $49.71 to $1611 in order to fire the final blow for a bailout. Chart 2 is the monthly chart for the S&P 500 and it has hardly flinched. As a matter of fact, the monthly chart will not fire a sell for another 100 points.

Small Cap daily on the left only fired one warning today because the CBL was broken. The monthly chart is also very safe and has another 69 points to lose for a sell signal.

International daily on the left fired no warnings so it is safe. The monthly 3 points to lose before a sell will be fired.

Bonds daily on the left and you can see that it is still a sell and now is near it’s all time lows, again. Monthly is not even close to a buy and is just down right ugly.

Conclusion. Be careful knee jerking out of the market based on one daily move. This is why I worked the last three years trying to figure out a way to smooth out the extremes. Yes, the S&P 500 fired 2 warnings in one day, but the third keeps us in. The monthly on the S&P, Small Cap, and International say long term, stay in. I will ride this down to the sell signals or I will ride it back up. If I loose faith in my charts, I will be right back to where I was prior to 2009.

Till tomorrow, rest your mind and let the charts speak. Now is when the news really needs to be turned off.