QUICK THOUGHTS
I will go over this in detail in the weekly chart review to be released in a few hours. Looking through the price action this past week, it is such a grossly muddled picture across all averages and sectors that it is difficult to bullish, even with the action in futures (+1% on news of a debt resolution) currently.
Investors should be cautious as we are entering a historically volatile period for the market. And I feel there will be more to the debt issue than meets the eye over the coming weeks.
I would be highly cautious of a powerful move up tomorrow morning in the averages.
I have moved to a 20% cash position. A relatively high number for me, as I am very bullish long-term. All of my current holdings have little to no correlation to the general market averages. I have shed whatever exposure I had to general market volatility last week.
If you haven't already done so, go ahead and read the results of the test I ran on our current oversold condition when paired with excessive pessimism. It gives way to some dramatic volatility over short periods of time over the past few years. I don't think this time will be different.
More details coming in the chart review later.
