Special Bulletin: Dec 22, 2022 (9:35am Update)

Not Asleep Just Yet, the Bears Strike Back

Today’s opening action is an expectation breaker. The failure of the S&P 500 to hold its 50-day mav and a simultaneous undercutting of its low of yesterday has caused our Current Market Outlook to flip back to a red signal.

As of 9:35am (SPX @ 3,834.69) our Current Market Outlook was downgraded to “Market in Correction” with a red light. Currently our “Core Four” (see top of page) still has 2 yellow and 2 red lights.

Yesterday’s hopeful stock market action has failed. In yesterday’s post we wrote, “The bulls must stand strong here now. Otherwise, the stock market will experience its own artic blast in short order.” It didn’t take long for the answer.

“When the facts change, I change my mind. What do you do, sir?” This famous quote, attributed to John Maynard Keynes, says it all about our C.M.O.’s immediate change to a red signal. We hate being wrong as much as anyone else, but being pig-headed or stubborn is worse. We analyze the math of the market and follow the footprints of money, and as of this morning they have reversed their course, and so have we.

It is still possible for the stock market to create a “higher low” chart pattern in the days/weeks ahead and attempt to mount a new rally from there, but for now conditions have changed and preservation is paramount.

Game plan: Continue to employ defensive risk management tactics. Watch to see if the market can rebound from the recent violent drop through the indexes 50-day mav’s, and monitor today’s volume to see if it proves to be another distribution day.

And may you and yours have a very Merry Christmas!

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ®