From yesterday morning’s update…
“So who’s driving the bus, SPX or DJIA? I don’t have that answer, but until the herds stop stampeding we would do well to respect what is in play right now, which is downside momentum. The Dow sure does look like it’s a good support level and yet SPX does not. Again, who will drive the bus?”
The US stock market made its attempt to bounce and failed. The margin man is in play, herds of Trumpies with new online broker accounts are being cleaned out (think of them as the stock market’s version of the inflationist gold bugs that periodically need to get sanitized) and it appears that it is SPX, which will provide the big test, not the DJIA, which has already ticked below its SMA 200 and support (not counting this morning’s deep red in the futures.
SPX on the other hand is simply due to test the 200 day moving average.
I offer this update as a visual on an intact stock market suffering greatly in the short-term due to what I have to believe is a combination of COVID-19 hysteria and a side order of fear about the most left leaning Democrat candidates. But speaking personally, as long as I can keep the portfolios in balance (with cash and precious metals positions) I think I will probably do a little buying on this test. Of course, a mental stop loss about any stock positions held or added would come into play if SPX were to take out the SMA 200 with authority. I personally think the bearish sentiment and momentum is getting overdone, but what do I know?
