Special Bulletin: April 6, 2022

Professional Selling Expands, New Lows too

The stock market is either running out of gas or pausing to recharge at this juncture.

We have written in the past about what we call a “question mark moment” and we are facing one now.

The “worries” of the day remain: War, Inflation, Covid, China, and Interest Rates. We call this WICCIR (It rhymes with quicker.) See prior post here.

As a result of today’s poor price and volume action (S&P 500 close at 4,481.15), our Current Market Outlook has been downgraded to “Uptrend Under Pressure” with a yellow light. The “Core Four” (see top of page) shows 2 green, 1 yellow and 1 red light which flips the signal back to yellow.

Last week we wrote, “There is a subtle, big picture chart pattern emerging in the main indexes that suggests a high risk of a “lower high” failure forcing a moment of decision soon. Rest assured, when underlying technical conditions do begin to deteriorate, our daily work of monitoring the footprints of money will recognize it early and our C.M.O. will change accordingly.” That is beginning to happen.

One important technical internal that is pointing to a growing risk of a rally failure is the recent expansion in new lows of “real” companies on the NYSE. This expansion in daily 52-week lows on the NYSE is coming just as the stock market is meeting price level resistance and setting up what we officially call a “sub-peak” chart pattern. Unless the market makes a strong upward move on increased volume, and soon, the stock market is facing a high probability of further declines in the months ahead.

In the meantime, April kicks off a new earnings season sure to be filled with many surprises. And then there’s always the “sell in May and go away” old adage to contend with. 🙂

Please note we have recently discovered that we are having technical issues with our “Outlook Updates” archive dropdown feature to the right of this post. Until further notice, please use the prior date links at the bottom left of each post to access certain earlier posts.

Game plan: Stay encouraged. The market is trying to prove itself. Big tests still await the market this spring: A surprise, early Fed hike? An acceleration of the war in Ukraine? Chinese military maneuvers? Monitor your positions in resilient watchlist leaders and keep losses small if they turn against you. Seek wisdom from the Lord Jesus.

Have a Triumphant day! ®