Yesterday’s rebound, which recovered just amount all of last Friday’s losses, was a welcome relief but huge one day market moves, whether up or down, are rarely indicative of a trend.
As I mentioned last Friday, I liquidated a few volatile positions with sector and country orientations. The sell stop points were clearly penetrated and, if this is in fact only a temporary bounce, we’ll be glad to have taken some volatility out of our portfolios. If this rebound turns out to be the resumption of the long-term trend, we’ll be looking for other opportunities.
Right now, I prefer to err on the side of caution. Our Trend Tracking Indexes (TTIs) recovered as well and remain above their long-term trend lines as follows:
Domestic TTI: +2.61%
International TTI: +2.53%
Most of my domestic and international positions have stayed above their sell stop points, and I will hold them until market activity tells me otherwise.
All eyes are now on the Fed for any hint that they are willing to throw an assist should the markets need it. Well, even the “Donald” (as in Trump) has thrown his name into the game on CNBC as he called for a rate cut. Hmm, he just can’t stand not being in the limelight.