Major averages fell on substantially higher volume. The major averages undercut their lows. While follow through days since 2000 for Investor's Business Daily have failed, we are in the age of QE which has invalidated many prior observations. The price/volume action of major averages and leading stocks carries the heaviest weighting thus while the market endures volatility, the economy is fragile, recession is clearly evident in the UK and in Europe, and a dearth of economic reports showing recovery are keeping Bernanke from saying he will start tapering on any particular date. All Bernanke can hope for is that the economy does indeed recover so he can start slowing the pace of quantitative easing (QE). In the meantime, the markets may find their footing once again and head higher. That said, should the markets and leading stocks continue lower, the model will switch out of its current buy signal into cash or sell signal, depending on the degree of selling pressure across the major averages and leading stocks.
Leading biotech and home building stocks got hit hard in the sell off. This pushes the model very close to a sell signal, but the floor that QE provides puts the model into a tipping point where it is close to switching but also close to staying on a buy signal.
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. ©2019 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.