Further, the government’s patchwork $800 billion money bail-out is about $3 trillion dollars too little. Monday’s Melt did produce a Dow Theory “sell signal” when the D-J Industrials (INDU/20188.52) closed below their December 2018 closing low of 23062.40.
At this point we are inclined to ignore that signal given the already ~30% carnage the senior index has experienced. We will consider it on any subsequent throwback rally.
And this morning that seems to be what we are getting with the preopening Dow futures up some 400-points as we write at 5:00 a.m. Oops, it’s now 5:30 a.m. and the Dow futures are down 200-points, good grief! Up 1000, down 1000, up 2000, down 3000; the whole thing reminds me of Sing Along with Mitch Miller and, “Follow the bouncing ball!”
Jeffrey D. Saut is founder of Saut Strategy LLC.