Special Bulletin: September 10, 2020

The Tone Has Changed, At Least For Now

As a result of heavy professional selling in stocks (Distribution Days) and closing violations of the major indexes under their 21 day moving averages during the week, our Current Market Outlook has been downgraded to “Uptrend Under Pressure” with a “yellow” light. One of our Core Four indicators remains green, with two now yellow and the last red. We noted almost 2 weeks ago that “Key sentiment indicators remain at excessively high levels that often precede a correction. While the signal is back to green, that sentiment aspect suggests there is still an above average chance of a meaningful pullback during the fall.” That correction has arrived.

It is important to note that the key 50 day moving averages have held thus far on the major indexes. That area of support is an important tell for this current bull market rally.

What should investors do now? Play defense: lock in some profits and sell your losers. Begin employing your exit strategy. Remember that September can be a difficult month for stocks. On a positive note, the technical conditions for a bear market are not yet present.

Have a Triumphant day! ®