Looks like the market wants to punish the technical analysts today and reward the Dippy (dippies: AKA dip buyers who view every red day as a buying opportunity regardless of the overall outlook or valuation of the stocks they purchase) who was buying like crazy yesterday. While I think these Dippies are silly I think they have a good chance of filling the gap we made in the chart yesterday. After filling the gap, investors should watch closely to what happens once we run into resistance at the 50 day moving average.
If the Dippies give up early, all bets are off — you want to be trading from the short side in our view because the market is well below the 50 day moving average even though the 200 day is still in tact. All in all, stocks could simply be correcting a bit here and could remain in an overall bull market but we view stocks as a risky asset class at current multiples. We actually prefer farmland, timberland, select undervalued equities, commodities, CD’s, foreign currencies, foreclosed real estate in beaten down areas like South Florida etc… to owning an index fund comprised of the average U.S. stock