Daily Investment Interpretations

March 14, 2011

2011-3-14 (Monday Night): The markets partially recovered by the end of the day, but not enough to avoid triggering a "sell" signal: U.S. stocks finish in the red as Japan remains in focusThe NASDAQ Composite gave up 14.64 points (-0.54%) to 2,700.97. The Dow dipped 51.54 points (-0.43%) to 11,993.16, while the S&P 500 dropped 7.89 points (-0.6%) to close at: 1,296.39. Oil ended the day a little higher, at $100.59 a barrel, while Gold closed at $1,425. The VIX rose 1.05 points to close at 21.13.
    Today's price action took all three main market indices below their 50-day moving averages, which is generally a "sell" signal. So far, this is looking similar to last November, but it's far from over. 
    Market futures are way down tonight (1 %). Now it's time to short the markets. My choices for this purpose are SDS, the Proshares Ultrashort S&P 500 ETF (currently at $22), or TZA, the Direxion Daily Small Cap Bear 3X ETF (currently at $41.95). there's been a third explosion at Japan's Fukushima nuclear facility, causing dives in Asian markets and U. S. futures.

    A final update on whether or not to short the markets should be available from TopStock Portfolios tomorrow morning before the markets open.

2011-3-14 (Monday Noon): The markets have fallen into the basement. In particular, they've broken through their 50-day moving averages, as well as other resistance levels. However, it's still not quite time to short the markets (although that could change at any moment). To the extent to which this breakdown is news-driven, the markets could still recover. At the moment, the indices are in low-volume plateaus. They're currently setting up wedge patterns from which breakouts will soon occur. Usually, the indices break in the direction in which they were initially heading (in this case, down), and these wedges have the bottoms falling and the bottoms flat, suggesting further downward action. How the indices emerge from their plateaus should tell the tale.