Ian Woodward's Investing Blog

At long last the Bears have made a meaningful penetration in the Bulls’ Rally and now we shall see whether they gain complete control or this is just another Knee Jerk.  However, far more damage has been done this time so do not expect a quick bounce back as we have had before…but who knows in this crazy market?

Here is the usual summary picture of the eight Market Indexes which shows the major drop in the last two days:

The Russell 2000 took a Major hit and is now just 10 points away from the high for a -4% Correction:

As we would expect, the Internals of the Market also took a beating as the Acc. to Dist. ratio is also down to 1.5:1

Over 11 Buckets down in %B in two days for the S&P 1500 shows the damage that has been done, so don’t expect a big snap back soon despite the market being so oversold.

The Big Red Kahunas at the bottom of this next chart says it all, and going by past history, the Bears have control:

…And Finally, the VIX Cushion disappeared in two days so be careful:

Best Regards,

Ian.

Today the Tom-toms are beating loudly to the downside, so I am writing this at 12.00 noon before the Market closes to give you my perspective on today’s action:

Here’s the snapshot of the Market Indexes which have taken a -1% dip today:

If the market remains down >-1% at the end of the day, here is what to expect in our favorite Buckets View:

My featured view and perspective in last Week’s Newsletter issued on the 15th January, shows what I expected was in store for us sooner rather than later, and today seems to be the start of nasty things with the shot across the bow.  We should expect at least a -4% down on most Indexes from their highs for starters:

The one saving grace from today’s action is that NFLX delivered an excellent Earnings Report and is hope for the Rally to continue!?

Stay alert and nimble!  Best Regards,

Ian.

One of these days we will have a Major knee jerk downwards, but for now we still have the Bulls frustrating the Bears with their Sound of Music!

The Market Indexes have been sluggish for four of the last five days, but all it took was yesterday to dull the hopes of the Bears one more time:

The Russell 2000 (RUT) stays on a consistent course and now the clue to when the breakage may occur is so simple from this trend line being broken:

The Canaries have also given the clue of topping action, but has now singled out the Leader as GOOG:

Now for a Summary of 2013 in a Nutshell as depicted by my good friend and partner, Ron Brown:

It has been a Very Strong Year adding to an even stronger Five Year scenario, which I showed you before, and suggests that the correction is even more likely in 2014.  How much will be apparent in the fullness of time.  Now for the more recent underpinning picture of the Market in terms of Accumulation/Distribution: Ho-Hum!

True to form, twelve drummer’s drumming is still the predominant periodicity:

…And Finally, the best clue of all of when to play to the upside or not is the VIX Cushion ala Woodward:

A Happy New Year  to you all, and just watch the key things to look for as shown above and you should stay on the right side of the Market.

Best Regards,

Ian.