On Edge

Investors were clearly on edge yesterday as the historically worst month for the market struck the bulls on the first trading day.

After an initial pop, it was straight downhill from there with no chance for a late day turnaround lurking in the wings. Everyone has been talking about the “bad” September and now that it’s here, we’ll have to see how it turns out. It’s only one trading day, and that does not indicate that a major trend reversal is at hand.

Our Trend Tracking Indexes (TTIs) retreated but remained comfortably above their trend lines and in bullish territory:

Domestic TTI: +5.57%
International TTI: +11.81%
Hedge TTI: +2.20%

Financials were the weakest sector and even relatively strong August auto sales could not reverse downward momentum. Of course, it’s the best kept secret that auto sales only showed strength because of the cash for clunkers stimulation gimmick.

It’s too early to tell if some sense of economic reality is finally setting in, or if this sell-off turns out to be short-lived with the bulls taking over the helm again.

In the end, what really matters is that you have a plan in place to deal with whatever scenario the markets throw at you. Not having such a strategy could be dangerous to your financial health.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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