On Sunday, August 23, 2015, I said the following: “Therefore,
my best guest is that we could see more early selling pressure Monday morning,
which would be a continuation of Friday’s selling along with early selling pressure
coming from Asia markets on Monday. However, I would not be surprised that
early selling would lead to a price reversal that actually leads to the market
closing higher on Monday. Then, the market could stage higher prices through
Wednesday. A sharp sell off Thursday and Friday, which would test
Monday’s low.”
What happened on Monday? The DJIA plummeted 1,089 points right
out of the gate, which was the largest single day drop ever. By days end, the DJIA recovered about half of
the initial loss to close over 500 points lower. According to my Sunday blog,
the DJIA did not close up for the day; however, it did recoup a significant
portion of that initial decline. Today, Tuesday, I was anticipated, as stated
Sunday, a rally to carry the DJIA up for the day. Well, it started out very
well. DJIA up 500 points, and, throughout the day, it was hovering about 250+
points higher. Then, in the last twenty minutes of trading, it tanked to close
204 points lower, which was very unimpressive.
I still believe that Monday’s low at 15,370.33 remains a critical mass.
If that price level is taken out, say within the next couple of weeks, the next
major support is at 14,300.
As I stated this past Friday, the DJIA’s 15/40-week Exponential
Moving Average (EMA) Strategy has spoken that the trend has changed from
bullish to bearish. And, until we have a reversal of that strategy, the best
investments going forward are Treasury Bills and inverse index funds.
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