Many technical indicators changed overnight in unison. First the end of the day volume was very low last night when the final numbers came in. Then, this morning, the low today undercut yesterday’s low. The Commodity channel fell as the Relative strength dropped significantly. Then the S&P dropped below the massive pivot line and the Histogram maxed out. The MAC/ D are in an upward negative trend- did not get near zero line combined with a Gap down at open this morning. The VIX went above 20 and the McClellan oscillator went to an overbought condition quickly.
Then the Fundamentals also changed. The Earnings numbers plunged for the year; down again and are now projected to End up lower than 2015’s $117 number if they stay on this path. The Market is struggling to get to a 1980 level; if this continues market will not set new highs this year. At this point the risk was too high to continue in the trade. The equity positions were sold and portfolios are in a neutral position waiting for the next trade. It is possible that the market has to go back down lower than the 1800 and wash itself out, before embarking on a more complete bounce. Partial trades protect our principal while allowing trades to develop before putting the entire position on. Option trades are still intact. More info to come.