Whatever-it-is (correction?)

Except for the 2% drop in the S&P on 22 February, there hasn’t been much volume in the last 2-weeks.  Most days have been below the 20-day moving average.  That sort of action, when the market goes down, but the volume goes down too, is not usually found in a correction.  The theory is that if there is increased selling, some fear will creep in and we should see volume increase as the S&P goes down.

 

To further confound us poor fools who try to predict these things, the only 2-days during this whatever-it-is (correction?) when the volume exceeded the 20-day moving average, occurred when the S&P fell to its lowest value (1306). Now the theory there is that at bottoms, the volume should be low – so that metric is going in the wrong direction too.  Now to be fair, a 3% drop isn’t much of a bottom and trying to use that type of technical analysis probably isn’t valid here.

 

So I’ll look the charts and see if we can make any sense of this mess.  I hate charts so this is painful….but, we can see that since this whatever-it-is started, we have a descending line of lower highs.  At the same time we have a floor at 1306 that would seem to be an established low.  Since that low occurred on higher volume. I’m not buying it as a bottom…yet. 

 

We’ll just have to wait and see how the market turns from here.  Either we break the descending line and move higher…maybe tomorrow?...or we drop down to (or below) the 1306 line. 

 

All of the metrics in our Navigate the Stock Market analysis improved today, but unfortunately, that doesn’t really predict where we will go from here – we’ll have to wait for a Buy signal – or it may roll back over and issue a Sell.  Currently, we still have a HOLD, or neutral, reading from the analysis.

 

I’m currently 30% invested and have hedged with a 2x-short position in my trading portfolio.  If the S&P looks like it will close up tomorrow, I’ll close the hedge position.