Let’s blame the action on European fears and poor economic data, but the trend changed well before today’s action. Today was another day in the market turmoil saga CNBC continues to push and it came as no surprise to us. The drop in the Philly Fed figure was a big nail in the coffin of this market, bull market from the lows of 2009. Volume surged across the board and well above average as institutions dumped stock on the market. Gold continues to do well in this market as uncertainty continues to be prevalent. Despite the lift off the lows this market remains dangerous as cash remains king and rule along side shorts.
Resist the temptation to find “bargains” in this market. Stocks are bargains for a reason and until this market can hammer out a bottom stocks aren’t to be owned here. Despite the decline bulls continue to remain strong as the Investors Intelligence survey remains at 46%, very high! They must be looking for those great bargains, perhaps bargains this past Monday? Stay way from the long side of the market until the storm clouds clear.
Stocks are broken right now, charts are torn up. Remember, fundamentals are always best at the top. Sell on the technicals, not the fundamentals. Remember how good those fundamentals were in November of 2007? They were great weren’t they? Unfortunately, too many were hit hard during this time thinking the fundamentals were still sound. Bottom line, the market remains weak and will continue to be weak. We have been spot on with this market and we’ll be ready when this market turns to the upside!
Stay prudent and make sure you kick up your studies on the market.