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The Triumphant Core Four

NYSE Internals
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Special Bulletin: November 26, 2021 (10am Update)


Will Black Friday’s Fear Trade Lead to a Red (Down) Monday?

Our Current Market Outlook has been downgraded to “Market in a Correction” with a red light as of 10am today. Our “Core Four” stands with 2 yellow and 2 red lights (see top of page) with the VIX breaking the tie and causing a change in the light to red.

The stock market’s tone has turned negative on the news-driven fear of an emerging C-19 variant out of South Africa. The risk/reward ratio for investing in growth stocks and the general stock market indexes continues to reflect higher than normal risk at these lofty price levels. Be prepared to become more defensive if the S&P500 & Nasdaq cut below their 50-day moving averages on increased volume in the days ahead. Depending on how the liberal news media spins the Nu virus over the weekend, beware of panic selling on Monday.

On November 18th in this blog post we wrote, “Is a black Monday likely to follow this year’s black Friday?”

While the odds are very low, the opportunity for a fear induced severe sell-off does exist. In light of this, and based on our “Core Four” internal indicators flashing a sell-signal this morning, we have increased our cash positions in our strategies and have employed certain inverse ETF’s as a hedge against the growing uncertainty.

Last week our blog also stated, “…there are certain other internal indicators currently working under the surface that are suggesting a growing deterioration. In fact, one tried and true old-fashioned technical indicator we know of actually issued a sell signal just this week.”

The number of stocks hitting their lowest price point in the past 52 weeks on the NYSE and the Nasdaq continues to increase. This is a growing technical concern!

One final note: It is in all investors best interests to remain calm and to think clearly at all times, but especially in times like this. There is a chance that the bulls on Wall Street, hoping this is a “buy the dip” opportunity, may not have stuffed themselves with too much turkey and may still be hungry enough to gobble up shares and drive the market higher. Tums anyone?

What to do now? Watch closely for vertical violations on the key 21 & 50-day mav’s of the main indexes. Be on the lookout for a cluster of Distribution Days (aka. professional selling) in the days ahead. Monitor the relationship of the rate of the US 10-year note to longer-term rates for further flattening of the yield curve.

Have a Triumphant day! ® 

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. ©2021 Triumphant Portfolio Management, LLC.

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