After closing at key support yesterday, today we broke through it as investors and traders
throw in the towel as hope disappears for an end of year rally.
With the bulls’ backs against the wall at the 20/50 day moving averages, we were at the point where we should have seen the bull camp mount a strong defense. And, while the probabilities were very high in my estimation, instead the sell pressure continued unabated.
What we saw today was more of the same ugly price action that continues to justify a defensive, cash-rich posture. Although greatly hesitant to do so, I must also caution that the price deterioration has now risen to the level that we’ll be fortunate if this is just another swing reversal amid the larger trading range as risk is also increasing for a crash-like fall. While I don’t say that without tremendous hesitation, I have to at least put it out there for consideration because when the market doesn’t trade the way it should and price continues to steadily deteriorate in this manner, it means we’ve got to do our job and put up every defense necessary.
Make no mistake – the market is now
guilty until proven innocent. While it is still possible that we will still see an end-of-year rally just to screw those who’ve finally given up hope this options expiration week, until the price action shows significant improvement, man those battle-stations and protect your capital.
Courtesy from Kirk Report
