There’s a lot of doomsday prognostications in stuff I’m reading about the markets tonight but the bottom line is you have to ignore what pretty much everyone says about the markets, and just follow price. Especially when a bear market starts because downtrends fuel all kinds of crazy speculation on where markets might go, and whether you should “buy the dip” or panic and run for the hills. Nobody knows the future so the best course of action is to have a plan and execute it as the market action unfolds.
The major market averages are all in Stage 3 now with the Dow Jones rolling into a Stage 4 according to my Stage Analysis screening tool.
Less than 30% of stocks in the NYSE are in Stage 2 now. That’s how weak the markets have become after last weeks’ carnage. Notice that the Biotech sector has barely 50% of stocks now in a Stage 2, and Biotech was one of the leading sectors in the market.
The U.S. dollar is in Stage 3 now which is potentially bullish for gold which has rallied hard off of its recent bottom. Gold is getting closer to testing it’s 30 week moving average now, even though commodities as a whole are still very weak and are in Stage 4 bear markets.