There is no reason to stay in the market at this point except if you think there might be a small bounce back up after such a large selloff yesterday. Everything on the S&P 500 is broken, CBL, 50 day ma, and the uptrend line. This correction has been running now for 7 weeks and you would think by now that things would stabilize and we would begin back to a rising market. Just because I think they should bounce and or rebound doesn’t mean they will, so you have to believe what you see. Yesterday we close right on the next support level that I drew last week at $1395 and if that doesn’t hold I think we are heading to $1350 to $1355 to test the next level. No one knows what really is going to happen, so unless we are trading at or above $1400 – $1406 by 11:45am, I’m going to step out of the market for awhile.
The Small Cap has the same issues as the S&P 500 but things here do not look quite as bad. If I bail today from the S&P, I will do the same with the Small Cap.
International is still hanging on nicely but if I bail from the S&P, I will also bail from here to safety.
Conclusion: I will make my post between 11:30 – 11:45 with my intentions. I really feel yesterday’s selloff was an over reaction but it is getting more and more difficult to argue with the charts and they have been saying to bailout or stay out since October 23rd. I was hoping that yellow channel on the S&P between 1417 – 1406 was going to hold, but yesterday was a back breaker. I think it is just time to step aside and watch whatever develops.
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