ARMAGEDDON OR A BUY?
After a day like this it is very easy to get carried away with things, get tied up in the moment and the fear, and run for the hills. This overall situation might well dictate that is the right move. However.......we do have alot of short term indications that a bounce is coming. On the top chart I have Larry Williams POIV indicator which is bullishly diverging not confirming this new low. Also when you look to the first panel underneath, you also see that trend indicator is still above it's trenline. The bottom graph, which is a proprietary contraption of mine, is also diverging after having hit a 3 standard deviation band, this is a bullish pattern.
I always buy above highs and sell below lows, so there will not be any buy signal for me tomorrow. I am looking for one and do expect that the COT report will show more commercial buying going on which could still give us a bigger bounce. Big picture I still think we have got some big problems here. I was listening to a talk show today here in San Diego called Invest Talk. The host is a money manager, and he completely dismissed any possibility of this being anything more than a correction that is close to ending. He might very well be right, but this is very indicative of the complacency that often is present at market tops. Most of these guys never see the big tops until the market has moved a large amount in the other direction. This is why most of them, and I do not know this guys track record so he may be an exception, do not beat the S&P. They stated that all that matters is earnings, well I will address that in due time, it is incorrect.
Based on what I have stated above, along with Larry Williams forecast calling for a turning point mid month, I conclude that a nice tradeable longside move is coming. I do not know if it will make new highs or not, I suspect it will not, but it should still for the short term, provide a good upmove. The VIX today did give a buy signal, which is a sell for stocks that should be good for a few days with the pattern that triggered it. As a result, we probably will go a bit lower in the next few days. That is a guess, divergences like what is shown above can trigger a reversal at any time.