We Have Room to Fall Further

Wednesday's decline was enough to produce another low for the Dow, going back a month. That certainly suggests that the slide I have been writing about is starting to materialize. True, the S&P 500 and Nasdaq both are still holding above the support, but since the indicators we have looked at repeatedly are still so overbought, it looks now as though aggressive traders could put on some short positions here. Another alternative would be to go long the gold miners, as suggested in the last two weeks, or the silver miners shown below.

Although the markets were under pressure on Wednesday, there continued to be little or no apparent fear. The Arms Index would be expected with such a drop to give a reading well into bearish territory, but such was not the case. Also, the volatility index (VIX) remains low, and volume is not heavy. That says we are not scaring anyone enough yet. Declines end in fear, and I see no fear, so the decline must have further to go....217 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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