Storm Clouds Are Ahead

Sleep is a good tonic. Sleep allows one to mull over market conditions in the solitude of slumber. Yesterday after the closing bell, I was disappointed. The breakout of the ascending triangle pattern did not power us up to the 1272 level. This was a red flag. On the other hand, volume was tremendous and out of the ordinary. The volume was the greatest since the July 1 bottom. You want to see tremendous volume to support an ascending triangle breakout.

But I quickly checked the Chaiken Money Flow indicator. This indicator tells me how much money is flowing into the market versus out of the market. Now, on a valid ascending triangle breakout, we should see the money flow go up! Instead, the money flow has dropped rapidly since last week. That's disturbing. It shows a higher level of institutional selling then I was anticipating.

When the market is behaving well, then the pieces fall into place. I forget about the market to be honest with you. During the month of September, I didn't give the market a second thought.

When the market is not behaving as it should, then it is a sign that storm clouds are ahead. One should prepare to exit and sell into strength. That was the game plan anyway but yesterday's price action confirmed the misbehavior of the market.

The period between December 11 and December 22 should be a seasonally weak period. If I know that the road ahead after December 11 will be weak, why stay in the C Fund?

I am expecting a weak day in the market today. If today is a weak day in the market, then I will be prepared to move 100% into the G Fund on Friday morning before December 11. December 11 is the key date for me, depending upon today's market action.

Institutions are selling into strength. I certainly expect to do the same. But I am now targeting 1253 as an exit price on Friday's close. This would give the Club a 3% rate of return for the month of December.

Two final points--If you are not already 100% in the C Fund, it is too late now in my opinion. Just wait until December 22 weakness. We are clawing for inches here while trying to avoid a Bull Trap.

Later.

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