As I’ve mentioned in previous posts, I’m not a trader. I follow long term trends and want to own low cost ETFs until I see a breakdown. We saw things begin to breakdown at end of last year and confirmed in January this year with international bonds, then in April and May with international stocks, emerging markets and commodities. (see: This too shall pass, May 6)
Now we are seeing significant pressure on US stocks according to the trend we follow. I never want to prognosticate, but the story the charts are telling me is not a happy one.
The S&P 500 has now put in the classic 10% correction that bullish analysts often view as buy signal. But every bear market drops below 10%. The behavior of high-yield funds suggests a continued posture of preparation.
Click to enlarge.