After a massive down day yesterday, the FOMC's decision to keep rates low seemed to keep the market aloft today. The S&P broke below the trend line and the 13-day moving average. The question becomes, if the Dow, S&P, and the Nasdaq all did this, why didn't the Russell? It would appear that small stocks are leading the way, and doing the best. This is odd considering that there has been so much talk that small caps have run up too much and you should put money into blue chip large caps. We are probably entering a down segment. The depth of the down segment is very questionable. The last one lasted a month and has steadily ascending volume. It was very potent. Will this be the end of the bull market and could we embark on the 25% correction that the World Bank seemed to think was likely? It's quite possible. It could also just be a normal correction and the bull market could continue. The gap analysis also supports the breakaway downward. The market gapped significantly lower yesterday, marking the breakaway from the top.
Because we don't know which this is, I'm not going to sell it short. By the time I was convinced that it was worth selling short, it probably would have bottomed. I'm going to hold on to my position in Potash because it looks like it's already bottomed out. I'm not going to enter any more positions until I see definitive signs that this market has put in a bottom. For now, I'm going to watch and scratch my head, maybe go take some pictures or something.
Disclosure: Long POT