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Hot knife through butter??? – Dr. J's Market Thoughts Press "Enter" to skip to content

Hot knife through butter???

On October 5th, I closed my public blog post with this thought:

On the other hand, *IF* we close below the $279-280 level near the lows of the day, I’d be very concerned about the health of the stock market and worry that a visit to the 200-day moving average near $276 or the bottom of the 2016 channel near $273 could be in the offing.  Something to consider and plan for as a long term investor if price should get down that low.  Enjoy your weekend.  Dr. J

Well, given the overall BEARISH action of today’s market (S&P500 down over 3%, QQQ’s down over 4%, Amazon down over $100 and 6%, etc…) I hope your portfolios didn’t get hurt too badly.  All my major retirement accounts DID lose money today, but less than 1% each, which I consider a huge win considering the overall damage in the marketplace today.  One small one made a little bit because it has exposure to an ETF that makes money as interest rates rise.  My trading account made money as it was set up to take advantage of a falling market.

Speaking specifically to the comment above, the market DID close below the $279-280 SPY level at $278.30 and continued lower AFTER the official 4:00 pm EDT close of the market (there is a 15-min futures and options trading session after the official 4:00 pm close) so YES, I AM CONCERNED ABOUT THE CURRENT HEALTH OF THE US STOCK MARKET BECAUSE OF THIS ACTION.  A gap lower opening just like February 6, 2018 is very likely tomorrow.  Are you prepared for that?

The 200 day moving average stands at $276.23 as of today.  The Market Alert Line is at $275.26 as of the close of September.  The 2016 channel I’ve drawn on almost every chart posted over the last 2 years has a lower trendline near $273.50.  If you are a subscriber, I am going to post an update with action items you need to consider at this point and how the Market Alert System can offer guidance.  If not, you may want to consider joining the service!