President Trump’s trade threats caused the market to gap down by the largest amount in months this morning.
Should you be concerned?
I’ll keep this short and simple.
Here are 3 conditions that I’ll use to expect more downside after today.
The market would benefit from a 5% to 10% sell-off, but how will you know it’s about to start?
The key ETF to watch may be the IWM, however I’ll consider all 3 rules below.
Here are 3 conditions that will suggest there is more downside to come.
1. The SPY closes below their 10-day moving average today. And then in then in the next few days it trades below today’s low.
2. The QQQ follows the same pattern outlined for the SPY in #1.
3. The IWM closes below 155, and then within a few days it trades below the low of the day it closed below 155.
While these may simplistic, these rules will keep you in this strong up trend if news events like today’s turn out to be knee jerk market reaction. And they’ll tell you when to expect a bigger decline.
Rick Nartarian, Chief Investment Officer
The American Investor Daily