Daily Market Snapshot
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| The Market Snapshot clearly illustrates the carnage in the market today. |
Market Direction Model
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| The entries for 04/10/2012 were all painted red. |
Trendline Analysis
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| NASDAQ Composite Index |
The Woody Indicator
(Volatility Indicator $VIX)
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| Volatility spiked up strongly today. |
The market was pushed over the edge today as volatility spiked and the leadership stocks finally broke. By the end of the day the market had given up a lot of ground; the market has now given up about 2 1/2 month's gains.
It is said that markets go up like stairs and down like elevators.
For the past two weeks, I have progressively raised cash in all Model Portfolios; today I moved to 100% cash in the accounts managed at Shareholders Service Group. Furthermore, I sold all current equity and flexible income positions held at FOLIOfn.
For FOLIOfn accounts, I took new positions in US Treasuries, German Bunds, Gold related ETFs and a small position in RWM, the Russell 2000 (small cap) inverse ETF.
The market is now oversold, so we should expect a bounce, perhaps tomorrow. If we do not get a significant bounce short term, this market will likely head further south.
I have no plans to buy this dip right away; that would be akin to trying to catch a falling knife The market has suffered severe damage; this correction needs to run it's course before it is safe to get back in.
I am inclined to sell short into any rallies. We will see.
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