etfmsolutions: Market Collapse...1.24.14

Friday, January 24, 2014

Market Collapse...1.24.14

Yesterday's cautionary note proved to be timely. Markets went from bad to worse, closing at the day's lows, with the DOW dropping 318 points to close below 16,000 and SPY below 180.
The VIX actually rose almost 31% today, the highest level in 3 months and the SPY TrendX (right side panel) is now sitting at a major support level.

How bad was it today? It was bad. One of the nifty tools that Schwab has on its EDGE platform is a real time advance/decline ticker for individual stocks and/or ETFs with a +1000 to -1000 scale.
For several 20 minute spans late in the afternoon SPY was reading -1000 in the red...meaning that NOBODY was buying a single share...that's selling as strong as it gets.

It would be reassuring to say the carnage is over but that's not clear at all.

Utilities (XLU) managed to stay in the green until midday when the selling began in earnest. XLU is generally regarded as a safe haven in times of market weakness but if XLU selling continues this will be a omen of more selling to come. Needless to say, M3 is in cash.

I'll be on the road next Monday and Tuesday and there will be no posts for those 2 days.

Commentary and Updates

Mosaic Solutions commentary is typically published daily as time permits and market action warrants.
Posts feature Mosaic model updates including delta neutral stops, VIXEN directional trades and PONZO forecasts.

NOTE: Posted risk exposure indicators, signals and metrics apply to Mosaic models only. They are not directly correlated with price movement in the major market indices and can not be used to forecast directional changes in those instruments.
Each Mosaic model is a unique blend of risk factors and must be treated accordingly.

TRENDX is a proprietary Mosaic market signal that blends volume, RSI, momentum and rate of change.

ETF Mosaic Solutions and the editors of Mosaic Solutions are neither an investment advisory service nor registered investment advisers or broker-dealers and do not purport to tell or suggest which securities or currencies readers should buy or sell for themselves.
This site and related software products are for research and educational purposes only, and nothing herein should be construed as an offer to buy or sell, or as a solicitation of an offer to buy or sell securities, or to provide individual investment advice.

Investing is risky and past performance, whether actual or tested, is no guarantee of future results.
Any quantitatively derived allocations referenced herein should only be starting points for conducting your own research.

You are responsible for your own trading decisions and resultant gains or losses. When in doubt, please seek professional guidance from a registered adviser who can respond to your personal needs and risk profile.