In this weekend's 301st edition of Turning Points we look at the necessary ingredients for a real market bottom and plot out how to take advantage of short-term swings in the market during the week ahead.
We moved back to cash on the equity side of our portfolios after taking advantage of what was a predictable setup to get short after the Fed meeting.
What was particularly striking about the post-Fed move was that it became obvious as we closed out the week that investors were actually waiting for the Fed to play savior, holding off on selling decisions until after the FOMC meeting. Once it became obvious that this Fed meeting would fail to produce a positive post-Fed result, as most investors expected, those same investors became trapped in a rapidly declining market that wanted to test its June lows with true expediency.
While the selling created a good deal of panic to close out the week, it didn't seem like the type of washout necessary to put in a sustainable low from which the market can mount a rally back over 4000 on the SPX.
This leaves the market with two options from here in order to create the type of base necessary from which the market can mount a real rally...
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