1. Moving the Markets

The market environment is getting shaky with the S&P now down 8 days in a row, which is the longest losing streak since Lehman collapsed in 2008. So, it’s no surprise that the volatility index (VIX) shared this dubious record by having rallied for 8 straight days, which is only the 3^rd time in history this has happened with the other dates being April 2012 and December 2013. (Hat tip to ZH for this data).

As I said yesterday, the pullback has been orderly and lacked magnitude, but odds seem to be increasing that downside momentum could accelerate with a vengeance, especially if an outsider like Trump were to win the elections next week.

Not helping the indexes today were several disappointing earnings and economic reports. Factory orders and initial jobless claims came in less than expected making tomorrow’s payroll report the center of attention in the hope that it could spark a rebound rally. It was interesting to note that today’s bad news was in fact bad news as the major indexes headed lower and not higher as they have been for most of this year. Is this a sign of things to come?

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1. Moving the Markets

Even the Fed with their announcement of leaving interest rates unchanged could not prevent the major indexes from slipping for the 7^th day in a row, which represents their longest losing streak in 5 years. However, when looking at the actual numbers it translates to a loss of only -2.5% for the S&P 500; hardly an earthshaking number.

Supporting this weakness was the fact that the Fed signaled that a December hike was in the cards and that they allegedly don’t need any more evidence before moving, that is if you translate their subtle announcement correctly.

What is more critical is the fact that this 7-day slippage was enough to propel our Domestic Trend Tracking Index (TTI) to the cusp of a new “Sell” signal, as you can see in section 3 below.

At this point in time, it’s always interesting to see if there are other indicators that are confirming a potential move into bear market territory. ZeroHedge featured 2 charts, which are indicative of the environment we are currently in. Take a look:

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1. Moving the Markets

Things looked dicey for a while as the major indexes headed south driven by mixed economic data, election-related news and concern over prospects for higher interest rates.

The S&P 500 briefly touched the 2,099 level before bouncing higher as a modest afternoon rebound limited today’s losses. Today’s close was the lowest since July 7 as the widely assumed presidential race tightened and brought into question Clinton’s widely priced in win.

Adding more uncertainty is the current Fed meeting with its statement due on Wednesday. While it’s a forgone conclusion that there will be no rate hike this month, Wall Street will be looking for signs of a possible hike in December.

Our Trend Tracking Indexes (TTIs) continue to weaken with the Domestic TTI heading towards a possible trend line break into bear market territory. You can see the latest numbers in section 3 below. Be sure to tune in regularly so you don’t miss the point in time when the next “Sell” signal occurs.

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1. Moving the Markets

You could consider this a “non-day” as the major indexes vacillated predominantly above their unchanged lines but ended up as close to zero losses as you can get.

Fallout from Friday’s disclosure by the FBI about resuming the probe into Hillary’s use of an unauthorized email system shifted into high gear and caused more uncertainty about the Democratic’s alleged lead in the presidential elections.

Not helping matters was the Chicago PMI, a measure of economic activity, which hit its lowest reading in 5 months, the upcoming jobs report this Friday as well as the ongoing 2-day Fed meeting about possible rate hikes, the verdict of which will be read on Wednesday. Given that, I don’t see the markets going anywhere until clarification on these matters surfaces.

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