LONG TERM TREND: Today is a good time to give you a glimpse of what's happening on the monthly chart (see attached). As you can see the market so far in August is down about 18% from the high made in July. There are two comparisons I want to draw your attention to: 1) Notice how this month price has declined below the mid channel line. This last happened on January, 2008 (1st down arrow on left) to help facilitate the last major bear market. 2) The 2nd down arrow from the left is when the month of July 2008 broke below the lower channel line, which absolutely confirmed a long term bear market. This is why the current lower channel line around the 1000 area is so important. If that level is broken the probabilities highly favor another major bear market.
SUGGESTION FOR 401-K: Obviously now is no time to get back in even though technically the long term trend is still up. Due to this there is still the potential to get back in if but I must see some strong weekly strength to consider this.
Have a great week and as always, your thoughts, feedback and questions are welcome!
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