After 3 up days, the short-term trend abruptly reversed, and the major market ETFs slipped based in part on speculation that Fed chief Bernanke’s widely anticipated announcement tomorrow may not include a major stimulus idea.
If so, that lack of action could further accelerate the downward momentum and confirm the current bearish market tendencies.
News out of Europe that rating agencies might downgrade German debt put the markets in a sour mood; however, those rumors were later denied. Warren Buffet’s panned investment in Bank of America generated some excitement, but could not overcome general market unease.
The beneficiary was gold, as the metal regained some if its lost luster with uncertainty being the theme of the day.
The sell off assisted our PRPFX hedge, which stands now at about the breakeven point, and it pushed our Domestic Trend Tracking Index (TTI) back below its long-term trend line by -0.26%.
All eyes are now on Ben Bernanke’s speech tomorrow.