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Good morning

It's been a tough week, I've been at home on Conv. leave, watching the markets in real-time and it hasn't been any fun when it's tanking and so are your positions. If you read Tuesday's blog then you know we had triggered the Down Friday & Monday Indicator, which hints at a 75% probability the markets will go lower than Monday's close, with the highest probability of the lowest close on Friday. I wanted to present this data on Monday, but the stats I had were ...

Good evening

We managed to retrace about 50% of price today, this is the classic setup where the markets want to leave you with questions unanswered. Based off the previous data I filtered last night, and adding to it today's data, the 3rd day's price action (of 59 similar occasions) is in a near dead heat between the upside/downside. You may notice the average positive returns are higher then the negative returns, this is because on 24 Nov, 2008 the markets closed up a whopping ...

Good morning

Monday was a "rare bird" event, where we see a significant down day while the markets are breaching record highs. To put this event into context, over the last 75 days we have traded for an average of 94% within the 30, 63, 126, 252, & 500 day high/low range. Generally when we are trading above 90% we won't see a -2% or greater pullback on any single day. In fact, prior to Monday, it has only happened 4 other times over the last 20 years. Below is a Monthly chart ...

As with everything I do I have a contingency plan. It's like going to war, when war is declared, you pull out a canned plan and make the adjustments as needed. My plan was canned back in December 2009 and I blogged about it.

Plan A: Avoid the loss in the first place (duh). I could have done this, but just couldn't seem to find a good opportunity.

Plan B: Look for a 50% retracement, bump up contributions to lower the cost bases per share. For those who had the stones ...

On a day like this I tend to get excited looking for new buying opportunities, but today isn't one of those days. After a review of systems and charts, I cannot in good faith recommend a buy under these circumstances. What I can do is present a few things and let you draw your own conclusion.

The systems I monitor did not trigger a buy and don't appear to be in any hurry to do so. When prices fall this drastically 1 of 2 things need to happen. Either reality needs to catch up to prices ...