Thursday, August 08, 2013
Sometimes the stock market gives off signals of impending doom that are so strong you can't believe it. If you spend enough time watching the market you know there a moments when the market screams buy me or sell and run. Like perfect waves for surfers, there are perfect waves in all markets that force you to scramble to catch them. You are tempted to sit back and watch. Really tempted. Because something like this doesn't happen so often and you can get tired waiting. You ask yourself if you trust your instincts and, if you do, you have to act.
This is what I am seeing.
1) Another Hindenberg Omen occurring after several over the past 6 weeks.
2) Several trend lines are in danger. I will show this in charts some time this week. I am beat, its been a rough week.
3) It's August. Always a good time to sell. (Actually May is the best.)
4) Interest rates have risen quickly and they haven't come down. JUST LIKE 1987. Maybe this is hyperbole but I can't think of a time when a bear market in treasuries would be scarier for the economy.
My advice from July 2nd still holds. And you know that these points can occur and bare no fruit. The good thing about years of experience is that you don't get these moments very often and yourself calling wrong usually happens pretty quickly.
Another Hindenburg Omen today. That is 4 in the past 5 days.
Short term and long term Elliott wave count on the S&P 500 is rolling over and very toptpy, respectively.
Something big will happen in the next couple of weeks. It looks to be down right now but a couple of hundred points up in the Dow negates the short term negativity. In fact, the stock market almost has to sell off big next week given all of the negative wave patterns, technical indicators, and seasonality.