The trees….short term moves…a 1 out of 10 on the importance scale. The forest…bigger picture…a 10 out of 10 on the importance scale. Too many want to call the bottom. Too many playing in the trees. When you have a chance, go check out the charts of the DOW, S&P, NASDAQ, NDX, SOX, XLF, KRE, XLI, XME, XLB and everything else under the sun. For lack of better words…an October meltdown. JUST REMEMBER…this did not start with the popular indices coming down. We wrote to you each week that the BIG 4 ACT FINE but half the market as well as foreign markets are sickly. Narrow and weak internals are easier to sell off if they decide to sell it off…thus you see what you are seeing.
Futures pop back up this morning…THE TREES. Stay in tune with THE FOREST. Everything except the most DEFENSIVE of all areas like UTILTIES and CONSUMER STAPLES now trade below longer term moving averages. The Dow ETF closed below its 200-day moving average today for the first time since March 2016, ending its longest run in its history…and the DOW usually holds up best when markets are hit. We have no clue to today and the short term. Just remember…THE FOREST!