This week was another tough one for the market, which closed
a tough month as well. For the week, the major indexes closed with a loss
between 0.5% (S&P500) and 1.15% (Dow and Russell 2000), and for the month
of January, the indexes closed with a loss of between 1.75% (Nasdaq) and over
5% (the Dow).
Volatility has risen to scary levels, with wild intraday
swings. Today as an example, the market opened with a over a 1% loss,
then spent half the day rising to get all the way to break even, then dropped a
little over 0.5% at the close. These wild swings usually portend major
trend changes, as fear starts to set in and day traders get extreme with their
behavior.
The next week will be critical for the bulls to see if they
can get control again, otherwise it looks like we have further to fall.
The market has been so resilient over the past year that I wouldn’t count on a
drop, but certainly with each passing day things are looking more ominous.
Looking at the charts of the major indexes, the Dow looks
broken, NYSE looks broken, S&P500 looks broken, Russell 2000 looks broken …
get my point? Only the Nasdaq looks a bit better although it also is
struggling.
It looks as though the market is giving a final “kiss
goodbye” for those of you that want to learn technical analysis, Google that …
it’s an interesting phenomena. We should know by the end of next week
whether this was indeed a kiss or just another fakeout.
As you know, “The One” moved to cash on Monday, and
interestingly our medium term strategy went fully to cash on Wednesday.
Only our longer term strategy is still invested. The fact that 2 of our 3
strats have left the market is probably a warning sign in itself that the character
of the market has changed.
Short term things are
definitely broken, Medium term things are broken or breaking (in the Nasdaq’s
case), but long term we are still ok, not great, but ok.
Regardless of the outcome, we will continue to monitor and
act accordingly protecting your hard earned investing dollars …
Hope you have a wonderful and safe weekend.
Respectfully,
Randall Mauro
Resnn Investments, LLC
Our market wrap is published weekly, sent via email on Friday after the market close, with alerts sent occasionally mid-week in particularly volatile times. To sign up for this free service, please visit our website at http://resnnInvestments.com
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