Not Lookin' too good

After X-mas the market had a chance to pull up. Cumulative breadth was rising, albeit stubbornly, and the "key" indicators were moving into a position from which upside action "should have" resulted. In my last post I noted the good news-bad news look to it all, placed my bets, put in my stops and sat back...And then it all caved in. So now what?

First, breadth fell apart:


The EMA 10 is below the EMA 55 and its all well below the 200


The weekly fell back hard, way below its key 21wma and the ROC 5 at below minus 10 is unusual, to say the least.


So what's it all mean? Well we are "oversold" but something more ominous is going on. Post the August wipe out the charts were still oscillating nicely in their buy low sell high mode but the gentle pattern of gradual wealth accumulation has, for the time being, been "disrupted". Cracks in the normal ebb and flow usually indicate deeper problems out there and this is not to be taken lightly. Kudos to the bears who had the good sense to cash in on these declines, but more to the point: caution to those who may have not lived through (or survived) big dips. Things can go from bad to worse. There will be rallies, but this is no time for the amateurs or those with funds that they cannot afford to lose....

But remember: life goes on and there are more important things than money: Like a freezing cold beach on a winter's day:


Good Luck in all your endeavors.

mm