Asian and European markets are off sharply this morning, sending U.S. futures sharply lower. The major averages closed roughly flat yesterday on lower volume as they appeared to be consolidating the prior two-day bounce. Major averages closed nearly flat on lower volume. While worries about the Fed slowing quantitative easing have put a yellow cautionary light on stocks for a number of weeks, the unemployment rate bumped up a tick, increasing the odds the Fed will stand pat on its speed of QE. Nevertheless, distribution days have piled up and the recent bounce has been on lighter volume. This morning's weakness implies a test of last week's lows and the ability of the market to hold these lows may be critical in determining the market's future direction. For now, however, the Market Direction Model remains in cash, reflecting the lack of any real trend developing in the market.
Some constructive action has been observed in leading stocks over the past three days, most of which have exhibited pocket pivot buy points which we have reported on over that period. How well these stocks hold up today in the face of this morning's futures sell-off may also provide a clue for investors, so maintaining a fluid posture while adhering to stops is likely the most prudent course of action on a stock-by-stock basis.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.