NEGATIVE EXPECTANCY

Sorry about the late update.  Typically I do this in Saturday morning but my wife and I decided to take a day trip to see the fall colors and do some wine tasting. 

THE TRENDS:  While the long term trend remains up a majority of the factors I look at point to a flip down in the intermediate term trend.  On Friday the market closed below the 10 week moving average of 143.61.  It still has not closed below 142.21, which is the only positive sign at this time.  If you look closely at the chart you'll see the April - May 2012 time frame circled.  By the time this pattern completed, the market had already dropped 3% from the April high.  The market then proceeded to drop another 7%.  The pattern we just completed on Friday looks eerily similar.  While all of the factors are not in place to indicate an intermediate term down trend, the probabilities favor a similar drop this time.

WHAT I WOULD DO WITH LONG TERM FUNDS:  With a 401-K I would move a large percentage, if not all of my money into cash.  There's always time to get back in if the intermediate term trend reasserts itself.  The same is true for IRA's.  Enjoy the rest of your weekend!