Things Are About to Get Ugly...

I've been warning about this type of situation since the end of March. I remember telling readers that although we will see the markets moving up in the short term future, they would need to climb up above (and stay above) the 200 day MA in order to signal a bottom. All the major indices have tried this and have failed quite miserably. Based on the charts, I would look out for some more downside in the upcoming days and weeks. In fact, the DJIA will at least retest its levels near the 52 week low. If things get really hairy, watch for a new low to be placed in. I don't like trying to predict the future. I just like predicting trends. That is what I do and I am calling it like I see it. The truth is, the markets are finally in a primary downtrend. That's right. The overall trend is down for the U.S. markets. That means keep long positions to a minimum. I don't really like to short stocks but if there isn't anything to buy, I don't mind taking an occasional short. The bottom line is, be careful out there. Keep a little cash handy and wait for the opportunities to surface. Never chase an opportunity. Trust me, they always appear once the dust settles.