Ian Woodward's Investing Blog

Stock Market: It’s the Real Thing!

We had a follow through day to the downside, and the odds favor “The Real Thing” over a “Knee Jerk” as I suggested as the alternatives in last night’s Blog Note.  I will treat this as an update to yesterday, so I will show you the charts with very little verbiage:

Real Picture

Ten Days Gains were lost in just two days on most Market Indexes:

Real Indexes

There is an inviting Gap between 3021 and 3076 that is below here and needs to be filled on the Nasdaq:

Real Nasdaq

The Russell 2000 (RUT) took a big hit these last two days with 7 Buckets down:

Real RUT

…While the VIX is inching up as you would expect.  It needs to get above the 200-dma at 17 to cause fireworks:

Real VIX

Since the two big days at the turn of the Year we have been waiting for the Big Guns to produce heavy selling and now we see it:

Real 8

The Leaders are getting Trounced:

Real Acc

7.2 Buckets in two days is hard to recover from, but don’t count out a Bounce Play.  The quality of that Bounce will tell us a lot:

Real Pat2

As we would expect, there is a big shift to the downside on the % of Stocks in the Lower Buckets:

Real Pat1

The majority of the evidence points to the downside, but sometimes the Market will fool you.  Stay alert, and Keep your Powder Dry.

Best regards,

Ian.

One Response to “Stock Market: It’s the Real Thing!”

  1. Paul R Says:

    Ian,

    Just a few days ago a good friend and I were discussing if all of your mumbo jumbo was correct this time. Counting the days from the high, watching Acc/Dist numbers, decreasing points score, the shot across the bow in early February, etc. etc. etc.

    Well your wit and wisdom has once again been proved wise and correct!

    Thanks for constantly driving home what to watch for and to think with reason. For once I wandered into this hiccup without holding a full hand.

    See you in a few weeks!

    Paul R

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