8-5-2011 Market Indicator Change Alert

The S&P 500 fell under our “Stop” level of 1248 Thursday in a dramatic fashion, with the major markets falling 5%+.   Both the Major Market Indicator #1 and #2 would have triggered to “DOWN” with the drop below 1248, except that the market fell so far below 1248 that it hit a key support level of 1200.  (S&P 500 1200 is a point where the market is more likely to recover).   Furthermore, the short term indicators that I use (but don’t publish) are indicating “UP”.

For the next day, the Major Market indicators (#1 and #2) will both stay on “UP” as long as the market closes over S&P 500 1195.   With any close of the S&P below 1195 both indicators move to “DOWN”.

Give the “volatile” situation over the last day I have substantially reduced my holdings in stock funds, and will move to 100% cash with a close below 1195.