No One Knows

First, the market moved perfectly for us. We saw negative futures that were obvious, the news was obvious, and we did not enter a new position to the call.

Upon market opening we saw massive drops and our Sept460 Put, bought at 3.66 average, sold to 5.20 by 3 p.m. Yet again, a profit every day this week.
Here's a letter from a subscriber that helps explain what she has been learning:

"Dear Floyd and company,
Hope you are having a good day! I don't contact you very often , but will try to do so. I have been paper trading for about a month. I have been making 1 and no more than 2 trades a week. I read your commentary every morning but only place trades that I feel comfortable with or should say am able to identify. Every trade for this past month has been conservative but profitable from 15-40% returns. I have a difficult time trading bi directionally. I get so focused on a trade that I lose sight of the bigger picture. Anyway my trading has been coming along but my lack of ability to identify and capitalize on clearly available trades has made it clear I have to take the trading a little more seriously. Just wanted to drop you a line on my progress and keep up the good work!"


And here from Floyd: the market turmoil and constant whipsaw shows a high level of FEAR, and a run from equities. And the run, all to bonds and Treasuries may soon be another bubble, while equities are undervalued (at least the top 50 that hoard cash). Amidst it we have chartists like John Murphy from stockcharts.com, a subscribed service, tell us his current thoughts, a diametric opposition to his commentary two days ago. What this says is "no one knows."

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-- S&P 500 STILL ON SHORT-TERM SELL SIGNAL
-- SMALL CAPS AND NASDAQ ARE LEADING MARKET LOWER
-- SO IS THE SEMICONDUCTOR INDEX
-- FALLING BOND YIELDS CONTINUE TO PULL STOCKS AND MOST COMMODITIES (EXCEPT FOR GOLD) LOWER
-- FALLING FOREIGN CURRENCIES ALSO HINT AT GLOBAL WEAKNESS

-- DEFENSIVE TREND MAY CONTINUE INTO THE AUTUMN