Special Bulletin: January 29th, 2018

The stock market suffered technical damage today via professional selling known as “Distribution”. The number of recent Distribution Days in the market is still relatively light. However, today’s higher volume selling, coupled with an expansion in the number of stocks hitting new 52-week lows, has caused our Current Market Outlook to be on the verge of changing to “Uptrend Under Pressure”. As mentioned in our bulletin from 01/18/18 (see below), the market did end up flashing an internal-indicator driven, first-stage “sell” signal on Friday the 19th. (Note: Our exit discipline involves 3 stages of “sell” signal alerts) In response, last week we began raising the levels of cash in a few of our strategies, and even initiated inverse ETF (“Short” hedge) positions in two of our equity strategies. Today we added an inverse ETF (“Short” hedge) position to a third equity strategy.

While more negative technical evidence would be needed before this stock market uptrend could be broken, recent price & volume action, along with certain internal indicators, strongly suggest investors need to be more cautious and vigilant in the days ahead. Stocks may be ready for a breather. Keep in mind, the President and the Fed will both make market moving announcements within the next 48 hours. While lower tax rates and a massive infrastructure spending bill should be received warmly, higher interest rates may not be. Stay tuned.

Have a Triumphant day! ®