Our Current Market Outlook has been immediately downgraded back to “Market in a Correction” with a red light as of 10am this morning (SPX 4,481.34). Our “Core Four” (see top of page) has 1 yellow and 3 red lights due to the major indexes slipping back under their 50-day mavs. The VIX is starting to rise but is still situated under its own 50-day mav. We will see in short order if the VIX confirms the new C.M.O. downgrade to red.
Yesterday we wrote, “Remain on guard as a sharp decline Friday or on Monday would likely move our signal right back to red.” And that is happening now.
Bear in mind that today is a triple-witching option expiration Friday. Volume will likely run high and volatility may pick up. It is entirely possible that the stock market could even reverse this afternoon and go positive. If that indeed happens, our technically based, disciplined process would cause our C.M.O. signal to improve once again. While no one likes being whipsawed, at certain moments of investor indecision throughout stock market history being whipsawed is inevitable for a time. This too shall pass.
An investor’s main focus needs to remain on the major indexes and their proximity to the 50-day mavs. Yesterday we wrote, and it bears repeating, “The market cannot go up or down much without violating it (the 50-day mav) in one direction or the other, and then leaving it behind as a new trend unfolds.” As the season is about to change to fall, the market’s prevailing trend may be about to change… and “fall” also. “Let’s be careful out there.” Hill Street Blues (1981-1987)
“Even the stork in the sky knows her seasons; and the turtledove and the swift and the thrush observe the time of their migration; but My people do not know the ordinance of the Lord.
How can you say, ‘We are wise, and the law of the Lord is with us’? But behold, the lying pen of the scribes has made it into a lie.” – Jeremiah 8:7-8 NASB 1995
Game plan: If the major indexes fail to get back over their 50-day mavs immediately, a sharp and colorful fall (think RED) could develop quickly. Wednesday’s and Thursday’s hotter inflation news may yet prove to be market moving – interest rates are the key! Stay on guard for a “vertical violation.” Pray for discernment.
Note: You can learn more about The Triumphant Core Four risk management system by clicking here.
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. ©2023 Triumphant Portfolio Management, LLC.
Where Are Woodward and Bernstein When We Need Them? This article was written by Newt