Special Alert: Seeing Is Believing

 

The Nasdaq was down 4% Wednesday, the Dow was down 2.4%. The equivilent of a 4% drop in the Dow would have been just over 1,000 points. 

In the bull market days, price action like this was rare, but then always, always, always a great time to buy. In a bear market, especially one that could be of epic proportions, declines like this are not buying opportunities, they are signposts. 

Here are the charts that make the bear case. Apply my "2-second" indicator. Look at the chart and you have 2 seconds to decide: Would you buy or sell this stock or index?  Two seconds allows your intuition, your subconscious, a big say the answer. Decide whether this is a normal correction in a bull market, or the beginning of something ugly. To make it easier, I'm using simple line charts. 

Dow Jones Industrial Average

Russell 2000

 

EEM

 

QQQ

SPY

VXX

 

GS

CRUS

 

Z (Zillow) 

 

BABA

 

GOOGL

 

 X (US Steel)

 

There are exceptions: TSLA is up over 10% after hours with a good earnings report. But then again the chip stocks are getting slaughtered. 

MU

 

NVDA 

 

Correct answers will be forthcoming.  Remember, not even bear markets go down in a straight line, there will be counter-trend rallies along the way and months of opportunity ahead.