Overall market bias and general scope

The blog will be under development for some time to come. I have more information to jam into these pages than time allows for me to type it all out (my typing skills do not help much).

A quick summary look, from my point of view, of the markets lead me to expect a down-turn that couldbe of some significant proportions. My trading style and technique never rely on huge moves within the market, and huge moves can not be seen forthcoming with any degree of accuracy. A large decline within the market now would not be a corrective move, but a primary move. Primary moves are the randomness of the market, they do have some degree of projection due to historical studies, but in a nutshell, you need to be prepared for almost anything.

A decline of about 15% in the market now would be corrective, anything beyond that point turns the move into a primary move. The clues that I am picking up from the price action within most securities, ETFs, and indices do indicate a very large down move is definately possible in the near future.

Most securities, at this point are not extended to the upside. They are compensating as they move. Although, a hand selected few are extended beyond levels ever seen in the markets history. This is where the principal of "no stock is left behind" rule comes into play. All regulated stocks need to be just that, regulated. This is what had me long many securities when the March bottom posted.

The ETFs and indices are all extended, but most components of each are not extended. This actually means, upon general market correction, these securities have a high probability chance of posting lows that will exceed the March lows by a substantial margin.

All inverse ETFs point at this probability also. Bear in mind, I have steered everyone I can away from these speculative issues. I do not believe these 2x and 3x ETFs have a place within a regulated market, and the market needs to remain regulated. The 2x and 3x ETFs and their inverses where brought into the market with one major purpose... to bring new money to the market. If these ETFs were brought into a level of more strict regulation, or if that regulation is present, but very loose, we are going to see a severe snap back correction in the inverse ETFs.

The overall market bias remains negative. In my opinion, your overall portfolio delta should reflect this by favoring the downside. Of course, we will have the whiplash action here and there to take capital from the majority, but the only obligation within the market, at this current time, is to the downside.