Top Down Review 8.23.2015

Welcome to this week’s video and chart of the week.


Last week was a challenge for any investors with long exposure as we had acceleration of declines and the NASDAQ and SP500 joined the Russell 2000 and Dow with breakdowns into the close.


We are now in correction territory so the obvious question is whether or not we have entered a BEAR.  I do not think that question can be answered yet, but we have clues that suggest that perhaps we are nearing the end of this BULL as the markets have turned negative on the year.


For me the question is whether the carnage we saw Thursday and Friday continues during the week or do we bounce from here?  By the time the market opens we may see a clue as to what direction we will take.  Will the Chinese government intervene in their market?  If so will the Shanghai respond with a move up off its lows?  If yes, then we may see the low in our markets over night.  If not we may have some more downside as the week begins.


I am expecting us to bounce this week as we are getting oversold to the point that a bounce becomes more likely.  However when that bounce occurs and where it stops becomes bigger issues.


For now I will watch the futures.  However, I am ready to unwind some of my short positions and contra ETFs when the charts suggest that we have bottomed.  That said, I do not think we are yet at a point that it is time to go all in, whether short or long.


Trade safe my friends




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