CHARTIST HOTLINE
Friday, December 18, 2015
Whenever the Dow rises or falls 1% or more we update this hotline.
So much for the Santa Claus rally. After a brief two-day rally the market has given it all back over the last two trading sessions and is once again in a heavily oversold condition. The Dow lost -367, -2.1%. In the last two trading sessions it has given up -620 points -3.5%. The Dow Transports losing -2.25% were hit even harder and in the process dropped below their August lows, which represent a major support area.
The transports which had been in the forefront of the bull market have now lost 20% since topping out in February. Most of the indexes are now below their 200 day lines as well as their respective November lows. A test of the August lows, a key support area, now seems imminent.
Both the Actual Cash Account and the Aggressive Account lost approximately -1.7% in today’s session.
All of the stocks in the Traders Portfolio finished underwater however none violated their mental stops. The closest was Phillips 66 (PSX) which closed at 80.56 the mental stop is at 80.08. Followed by Hartford Financial (HIG) which closed at 42.11 with a mental stop of 41.25.
Putting it all together we are getting very close to an outright sell signal. It does not look good.
Our next regular hotline is scheduled for Tuesday, December 22nd, 3:00 p.m., West Coast Time. However, in the event of a sell signal we will announce it over Monday’s hotline.
