A 'tipping point' arrived - in the week just past. Any number of issues we've outlined for some time, contributed to the return; first of allowance for dips; to a realization of 'minor' corrections; to early stages of outright portfolio fear, as investors and especially leveraged money managers, reluctantly find fewer, if any, rationales to convey optimism; thus get compelled to become defensive. (Domestic & global analysis follow.)
It is no wonder Treasury Secretary Lew Friday afternoon said 'nations must refrain from competitive devaluations', and that 'policies are needed globally that -forcefully- support global demand. From what I can tell, this statement got virtually 'no press'; and perhaps that's because it confirms what we have observed about the currency and trade mess; it's every central bank (more).
Nervous rebound and failures- highlighted Friday efforts to stall descent into an 'abyss' or underlying S&P vacuum I've identified for several weeks. and entered Thursday before the holding effort expected to falter on Friday. That was because of the proximity of the recent lows; the nearing 200 DMA; military and health concerns over the weekend; etc. But mostly technical.
Technically, we expect (this regards the 200-day Moving Average and how we believe it will be traded around and ensuing behavior).
Daily action - forewarns not to be misled by any efforts to (for members).
Now, we do want to note something about Oil: 'if' it's true that ISIS has now entered one of Baghdad's suburbs, there will be renewed fears. The obvious ineffectiveness (full discussion for our membership).
So we are properly 'cloaked' by defensive strategies; cash built-up over time, not by panic on a dime; additionally shorted the E-mini / Dec. S&P position posture from 2007; plus a carry-over Friday intraday guidline from 1929 after taking over a 20 handle gain on the previous day's intraday short guideline (effectively bettering the prior day's 1951 intraday S&P short net).
Enjoy the weekend!
Gene Inger
