Did you enjoy your mini-flash crash at the end of the day today? Stocks pulled off a mini-flash crash at the midpoint of the final hour today as stocks sold off across the board with the–you guessed it–Russell 2000 leading the way lower. The minor good news for the bulls is that volume was lower than the day before. The bad news for the bulls is that the velocity of the sell offs continue to trump the velocity of the rallies. When you take this into account with all of the other problems I have listed over the past week, the list of negatives just keep piling higher and higher. Maybe it is a contrarian signal. However, my spidey senses tell me it is not and that we need to continue to exercise extreme caution here on the intermediate term.
When the market starts to find some normalcy without all the V-shaped moves and I start to get some more high quality technical patterns, I will be glad to flip the switch and change my mind on the current market outlook. For now, as each day passes the writing just becomes clearer and clearer as to what the future will probably store for 2016. I am ready for everything but I lived through 2000 and 2007. I penned ad naseum about the issues then and the exact same issues are in play now. Until it changes, I will continue to preach protection once again. For further in depth analysis, I recommend watching the Video Lesson below.
Alright everyone. One more session left before this year is over. It has been interesting to say the least. I wouldn’t call it a terrible year but it was pretty close. I will still be leaving with an overall gain for the year so I guess I will have to take that as a victory when so many hedge funds are down double digits. If not for December, this year would have been a success in my opinion due to us navigating the volatility very well. However, December ruined that. Onward and forward into 2016. I’ll see you in the chat room on Thursday. Aloha.
