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| The Bears have taken the lead. |
Chart View
S&P 500
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| 5 Days down in a row |
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| Uptrend under pressure |
Our Woody Indicator, which measures investor fear and greed, spiked dramatically higher on Friday.
Woodie Indicator
VIX Index
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| Investors accelerated their purchase of protective options(the VIX Index) in a big way. |
We haven't seen this type of spike in volatility for some time. As the chart above indicates, we are now in an extremely high risk market. The chart is clearly telling us that it's time to "Run for the Hills."
As I mentioned in yesterday's blog post, all GWM Model portfolios are now weighted heavily in cash. If the politicians strike a deal on Monday, the markets will rally strongly. If they do not, the markets could drop a few hundred points. I prefer not to gamble on the outcome. Our indicators are definitely suggesting caution at this juncture. If we miss a strong bounce on good news, so be it. Given the poor track record of congressmen getting something done, I am inclined to error on the side of prudence.
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