June 23, 2009
The markets moved sideways today, but yesterday was a 14:1 down day for
the S&P 500, and the market outlook is grim.
Composite ended the day down
(basically unchanged), the Dow
close at 8,322.91, and the S&P 500 added 2.06
to end the day at 893.04.
a barrel, while gold
This is the second day the Dow and the S&P 500 have closed under their
50-day and 200-day moving averages, while the Nasdaq Composite has
penetrated its 25-day average but is still above its 50-day average. The
short-term (25-day) averages have topped and turned slightly down for the
Dow and the S&P 500, while the 50-day averages have flattened. All
three of my market timing advisors have turned cautious. The next major
resistance comes at S&P = 880. If the bears break through there, it
will probably be time for wholesale selling.
Michael Ashbaugh's Tuesday technical analysis (Down time),
reaffirms that the market broke down yesterday, and the most likely path
is a move lower from here. He mentions that the VIX still signals
remarkable complacency: Fear gauge is on the rise, but not fear itself.
Cabot's China and Emerging Markets Report has just
recommended that we subscribers sell a portion of our holdings.