11-15-11 Comments
Yesterday was the lightest volume of the entire year. Sometimes I read light volume as complacency. This time I read it as a light news day in the middle of a news hurricane season. The market is dithering at the 200-day moving average. Most bear markets unfold with three or more waves down and the first rally after the first wave down most often fails at the 200-day moving average. If the current bear market is finished it would be very unusual. So I am guessing that Mr. Market will be informing us soon about its next move. Seasonality may suggest that Mr. Market could wait to see what Santa Claus has in his sack.
Portfolio is: SWI, SBH, GLD, ISRG, UA, PCLN, SPRD
Market School Market Exposure Count is +5, 100% in.
The distribution count is 4. One more day of distribution or stalling would give us an S3 market sell signal reducing the count.
Yesterday's NASDAQ lows penetrated the 21-day ema. A close 0.2% or more below would issue a S5 market sell signal. It isn't impossible that both Sell Signals could fire if we have a bad day today.
The prior S5 sell signal on 11/1/11 had the effect of forcing me to weed the garden. I sold DLTR as it was my poorest performing stock in the portfolio and its earnings date is approaching.
Mike Scott
Cloverdale, CA