IT IS NOT A PANIC

... but I recommend stay on the sideline. After a long time of bullish market we are on the sideline recently and waiting from some indicating signal which way go the indices going up or going down. That is the best you can do at this point. The falling so far has been fast enough and maybe we might see another Dead Cat Rebounce within few days.

Generally we are still bullish on the market because it is still a bull market, and as the old rule says on the bull market three positions you can possible have. Really bullish, kind of bullish or neutral. Don’t go short on a bull market. Our bet now is for a proper position is being neutral. The bull trend is not yet violated only the rally got stopped and could rally again, but for this we need some clear confirmation by Mr. Market. This is not a bear market at all. But true we have had severe and pretty nasty correction this year. This is the time to gnash the teeth, and sometimes is hard to accept this kind of corrections. 

In term of technical analysis the Dow needs to close above the 15.750 key level that would be a confirmation of tracking back. But in the worst case scenario the DJIA could back test the 14.000 support level, which was the 13 years trend channel’s top. The only problem is that in the last two days after the big dive on Monday the market doesn’t show strength and couldn’t recover at all from the ground. This is not a good sign.

The BFM Assets Team.