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The Triumphant Core Four

NYSE Internals
Moving Averages
Professional Selling
Investor Sentiment

Special Bulletin: June 9, 2022 (3pm Update)


A Downgrade and a Flash Point

As of 3pm today (actually a 2:30pm signal that was confirmed at 3pm) the stock market was succumbing to selling pressure and was falling back into a technical correction.

As bad as today’s action is, tomorrow mornings release of May’s consumer price index will be a major market mover. Believe it or not, it is entirely possible that today’s downgrade to a red signal could even reverse back to yellow if the big institutions like the CPI number and stampede back into stocks on Friday or Monday. But if they don’t like them, oh my, look out below.

Officially, the stock market is at a flash point.

While we don’t like getting whipsawed, that is the possible reality of this type of current market environment. Having said that, the trend is currently down and as such we are respecting that signal by raising our already high levels of cash today.

Our Current Market Outlook is being downgraded to “Market in a Correction” with a red light. (SPX @ 4067.49) The “Core Four” (see top of page) now shows 1 green and 3 red lights. 

While nothing in the market is for certain, and almost anything can happen, we pay close attention to probabilities. We see three primary possible outcomes from the current conditions.

First, a move straight up to the key indexes 50-day mav’s as a positive response to the CPI numbers. From there a new set of variables emerge.

Second, and the most probable, the stock market undergoes a “low, rally, retest” sequence (with the “low” and “rally” having already happened) and moves lower in the days ahead and does a near-miss retest of the lows of a few weeks ago. Again, from there new probable outcomes arise.

And third, investors hate the CPI announcement and stocks head dramatically lower like an elevator with a snapped cable. Very unpleasant.

It is important to note that the VIX has not been showing signs of great fear over the past several days, including today. In fact, now, it is trading under it’s all important 50-day moving average. Based on historical evidence, this suggests that tomorrow’s CPI number may not be received all that badly. Whether it is bad news or not, many are asking “has it already been baked into” the prices of stocks? We will find out tomorrow.

Game plan: Continue asking Jesus for wisdom and patience. Refresh your watch list and remain patient. Beware of days with large price drops on explosive volume (aka. Distribution Days).

Have a Triumphant day! ® 

Ps. Happy 5th birthday to Big H! Grandmom and I love you!

The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2022 Triumphant Portfolio Management, LLC.

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