Yesterday the US stock market averages fell in the morning and turned around. The S&P 500 held its 2580-2600 support zone. I have seen people on CNBC attack trading robots as a cause for the recent selling, but clearly, robots came in to buy at 2580 as that is an obvious support point that I even mentioned in this weekend’s Power Investor update.
The market is likely to hold up above this support level and bounce into next week’s FOMC meeting and perhaps into Christmas, which comes a few days after it. But after that bounce 2019 is going to be a very brutal year and I believe most people would be best to plan ahead for that now as I mentioned Sunday.
That said if the market goes up at all from here bottoms calls will be made everywhere and I know that right now all most people still care about is buying the fad stocks. I did a video update about five stocks to watch on a bounce here:
Perhaps the S&P 500 can bounce back up to 2700. I notice that gold and gold stocks are up again today. The real money is rotating into defensive sectors now. I personally WILL NOT buy Apple or Facebook or these other now broken stocks. The big trends are changing and that’s what I go with and there is a reason my Seven Position Portfolio that I started around Labor Day is up while the stock market is down.
What I am doing is buying defensive asset classes stocks and actually betting against junk stocks lagging the market with huge debt loads. A bounce will give me an opportunity to bet against more of them and if it comes I will release another PDF for my private trading group with a list of such stocks.
Here is this morning’s video: