Yesterday was not an uplifting day in the markets as an early rally faded, and the major indexes closed near their lows of the session. We have become almost accustomed to last hour rebounds just as we’ve seen last Friday, but no luck this time.
The Dow closed below the 10k level for the first time since November as fears about European debt problems persisted, despite the G-7 trying to put a positive spin on developments over the weekend.
These issues are not likely to disappear by next week so I expect more market uncertainly along with confusion leading to choppy activity. We may be going sideways with a slightly negative bias meaning that the potential of a trend line crossing to the downside is a real possibility.
Our trend tracking indexes (TTIs) confirm that we are within striking distance of moving back into bear market territory.
As of today, the domestic TTI hovers only +2.31% above its long-term trend line, while the international TTI is clearly knocking at the bearish door with a position of only +0.33% above its respective trend line.
If you follow along on your own, you too should have been stopped out of most international holdings. If not, be sure to review your sell stop trigger points.