My advice to you is follow the charts, treat the market like you would any other time but as we get closer to the middle of the month if the market turns back up have eyes in the back of your head to not be the last man in. What that means is keep tight stops and don’t get complacent. If you have long profits be sure you bank them as opposed to letting them run just a little longer. This is a time to be extremely cautious.
If we continue to sink there’s an outside chance we could have an inversion bottom by the late date near the 20th although with the VIX behaving the way it is the chances of an October peak still outweigh a low because I just can’t see the VIX getting anywhere near 30 in the next 2 weeks.
In an unrelated story, the New York Post (of all publications) reported that US investors pulled $300B out of equity markets the past 2 years and over $4 billion last week alone. Wow! Can you believe that? The public pulled out just as markets surged to new highs again. This is exactly what you’d expect from the public who are always the last ones to benefit from a bull market and plays into exactly what I’ve been telling you for over a year. Chances are we are in the very early stages of a new secular bull market. Just because markets are at new highs does it mean it’s a long term top. Tops are characterized by Aunt Mary, Uncle Bob and your cab driver being obsessed. The market truth right now is just the opposite which is why a true market top is still years away. So if we do top this month, with the information we have right now it’s likely nothing more than a garden variety bear which is enough to do serious damage but nothing generational on the order of another 2008.