Traders should be ready to have their heads handed to them if they want to play in this market shell game. There is really no telling what will happen the rest of the week. This is all a classic backyard experiment that changes every hour as the “scientists” get new ideas. Good luck.
As for me, I’ve been sitting on cash, short term treasuries via [[SHY]] , and net short 10% via inverse ETFs.
On a Costanza note, the ratio of new 52-week highs to new highs + new lows has now dropped to just over 10%, on a 10-day MA.
The last time it got this low was July of this year. It also got this low in August of last year. The only other times it was this low in the last ten years was September 1998, September 1999, and July 2002.
Needless to say, we have seen a historic-type sell-off again. In fact, according to Dorsey Wright research, this ratio has reached 10% or lower, a total of only 16 times since March of 1980. “The average number of days for this indicator to reverse back up after hitting the 10% level is 22 days with a range from 5 days to 37 days”, says Dorsey.
Have a good day, be safe, and don’t stick your neck out too far.
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