The Selloff in Stocks Continues Supported By Internals

As discussed in the weekend Briefing and the Sunday update, news and fear resulted in a major selloff in Stocks today. At the end of the day the Indices were extremely oversold. This condition can continue based on additional fear entering the market. If businesses continue to close and the government continues its issue closings, Stocks will likely continue their slide.

At the close today, all of the strength the Indices demonstrated on Friday was eliminated and the internal structure of the decline was supported. No strength in any of the internals was exhibited. At some point, we will reach a bottom. When this occurs, it will be a tremendous buying opportunity. The only thing we can do at this point is continue with select short positions and look for some type of bottom formation.

Gold was down nicely today but then recovered some. Silver was down substantially but did not recover as well as gold. Until silver shows some sign of strength, I am leery of long positions in the metals. While most are proclaiming the Fed’s actions are going to decrease the value of the Dollar, causing gold to rise, I believe we are witnessing a liquidity crisis where most assets are being liquidated to raise cash by larger funds. Until that ends, the trend is down.

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