And we had this
Neither is a surprise, thought, is it? Markets can become very volatile in the course of heavy distribution and US debt rating has been under a lot of pressure and speculation for some time
The combination of the two, however, leaves me to wonder if the sharp bounce out of the low of Friday was not to drag in some bidders on hopes of a reversal only to gap down and squash them Sunday evening in the futures markets
So, was that monster bounce just to drag the last of the hopefuls in to wash them out penniless?
Lots of people will have a weekend of angst. That is why I am so keen on risk identification and management
I Hope Sunday evening stays benign and a time of reflection, but, till then, this is going to be a weekend of indigestion for many
Risk management is the only play of this game, everything else is throwing darts no matter how skillful the dart thrower technically or fundamentally. folks only the liars and the delusional know the future and any forecast, however sincere and learned, is just a probabilistic model. Models fail and it is our job to at least think about the ways they might break.
In the previous post of August 1, here in this free blog, I wrote that:
And that is exactly what has happened.
How did I make such a good call?
How was I able to warn readers of Market Time Premium of possible nastiness in the market?
It was not knowing the future, it was just a case presented based on the weight of the evidence. Let's see the evidence as I collected from the time S&P was above 1340
-- We lost the prior short-term uptrend without at least making a higher high on the swing
-- We lost 1290-1300 which send me into defense
-- We saw deterioration in Structual integrity of the index as I gauge by mid-term OEW and Market Alignment Index Indicators
-- We lost key weekly moving averages
We lost .............
The rest of this report is reserved for subscribers of Market Time Premium
For full regular market analysis, subscribe to premium content at
Market Time Premium
Investing in the financial markets can involve considerable risk. Past performance is not necessarily an indication of future performance. All information included in Market Time Premium reflects ongoing thoughts of Market Time authors about market-related issues, and is prepared for educational purposes, and is presented as authors’ observations, and is not a solicitation, or an offer to buy or sell any security or use any particular system. Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. Market Time Premium, its author(s), and its affiliates do not represent themselves as acting in the position of an investment adviser or investment manager. Market Time Premium, its author(s), and its affiliates shall not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. From time to time, Market Time Premium, its author(s), and its affiliates may hold positions in securities mentioned, but are under no obligation to either divulge or hold such positions.