MARKET ALERT — Is the stock market set to drop ? – We understand that the US stock market was sold aggressively on 11 October leading to a broad-based fall of US stocks. It was further reported that the Traders Index (TRIN) showed intense selling pressure as the market moved to the lows of the day, and that the VIX index, a barometer of nervousness, has been making a series of higher lows since August.
This has led HSBC’s technical-analysis team to throw up the ultimate warning signal leading a high “MARKET ALERT” for an imminent sell-off in stocks given the price action over the past few weeks.
It has been stated that followers of the Elliott Wave Principle, which tracks alternating patterns in the stock market to discern investors’ behaviour and an indicator of market movements have highlighted the market’s similarities to the 1987 crash just a few days ago.
Given the 200-point decline for the Dow on Tuesday, then the next big drop maybe imminent.
On the other hand, these market traders may simply have been following my gloomy investment related blogs!
With the market values being inflated by the printing of money and the lack of alternative places to put your money, we would recommend that you consider how exposed you are to an investment market fall off right now.
We would certainly recommend that you consider reducing your US Stock market exposure and trim back your UK equity exposure – for now.
Remember October is typically the month that investment market sell offs occur.