[Some Analysis]
Dear Member:
I have looked at several hundred charts this morning and was struck by the number of stocks that have broken down through trend lines and price supports. Both the Dow 30 and the SP-500 have retreated to or just below their 50 day exponential moving averages. The Nasdaq has not dropped that far but did break down through a support level.
I am writing this information to let you know that I don't see too much that is bullish for the moment. That idea is supported by the increasing volatility in the VIX, VXO and VXN (measures of volatility). Increasing volatility often suggests a bearish market move.
Canadian National (CNI) is one of those that is at least continuing to hang in there.
Bottom line for me is patience right now. The market will soon tell whether we are in for a bit of a slide or whether things will firm up. It is a time for extra caution for bullish players in my estimation. Clearly, there are times when the sidelines are the place to be and it looks like now may be one of those times.
Sincerely,
Bill Kraft
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