Good Evening Folks
Well, today it is October 13, and maybe that is a bad number to start the week on, as the Dow Jones is down over 200 points. Today, as most of us are aware, is a Federal holiday, however the markets were open, a sort of oddity but these things happen nonetheless. Historically, Columbus day is a quiet day in the markets, as most schools are closed and it indeed is a national holiday. Indeed, in past years, Columbus Day has witnessed reduced action due to traders and Wall Street participants on a three-day weekend.
Except for today’s Columbus day. SP 500 and NASDAQ volume was huge, with severe losses on all indexes. As stated, the Dow was down over 200 points. The SP 500 is my “go to index” but I make mention of the Dow because every financial news site is in love with that index, so I will make reference to it here also. The SP 500 Exchange Traded Fund (ETF), ticker symbol SPY, which trades like a stock and is designed to “mirror” the SP 500 index, traded lower on double its average trading volume. A very important level, 1900, on the SP 500, was violently penetrated to the downside, today.
Lets look at some charts:
As can be seen via these charts, with comments on the charts, the Bearish action continues. Important to note is that the index is now below its prior lows in the 1900 area, an area in which I went to G-Fund in early August, only to have the index (at that time) suspiciously reverse course upward. I kind of beat myself up (and took a rubbing) on that “call” but I remained firm, as my system was indicating weakness ahead. Many approached me one-on-one and asked my opinion, my reply was that I was remaining in G-Fund as I was skeptical of the that uptrend, which lasted most of August but on very low volume (apparent on above charts). A few elected to be lone rangers and “do their own thing” (Type A personalities, gotta love our colleagues, bless their hearts) while others decided to remain in G-Fund.
Comment: Remember my prior post about “8 weeks” from market peak and early warning signs, to when the real damage starts to occur? My prior post stated “mid November” as the most recent market peak (8 weeks prior) was “mid September.” BUT if we go back further, before mid-Sept, the market peaked in late July, approx July 25. It then broke down and I went to G-Fund. Using the market peak of July 25, lets add 8 weeks to that, that gives us Oct 25. So my point (rambling…) is things may actually be falling apart now, versus mid-November. That is kind of in the crystal-ball category but it is something to mention.
I continue to remain 100% G-Fund.
Thanks for reading and lets see how this week plays out. Please share, tell, demand, order your colleagues to sign up for email updates to this site, if you feel they would benefit. Thanks !
– Bill Pritchard
