When our Wealth Preserver market indicator turned bearish on October 31, I assumed it was primarily based on political greed. We remain convinced that it commenced from politics, nonetheless, the market now is showing signs that market technicals internationally are supporting a further decline. 

The October Wealth Preserver Signal. Following this signal would have prevented a -6.11% decline in account value through December 17, 2018.

Traders are not more convinced that technicals are breaking down and that could cause a further decline, maybe a watershed event. Although I believe it is a temporary decline, the markets always tell the truth and we do not argue with them. 

At this time, the market is trading below last year’s close of 267361 which is bearish. In addition, we have broken beneath last month’s low. Nonetheless, this is still a reaction decline. However, penetrating this month’s low next month and closing lower would hint of a further decline just ahead going possibly into February. We now need to close below 2631 on a monthly basis to imply a full technical reversal of trend to the downside. 

Thus, if you cannot stomach further volatility, preservation and a temporary move to the sideline is warranted.

WHAT IFs

If today were the last trading day of December, what would the signal be? 

Dow Jones Signal

Dow would have a Red Light “IF” this were month end.
Please understand that the red light can revert back before month end if the market turn up. 

Nasdaq Signal

The Nasdaq would have a Red Light “IF” this were month end.. 
Please understand that the red light can revert back before month end if the market turn up. 

Russell 2000 Signal

The Russell 2000 would have a Red Light “IF” this were month end.
Please understand that the red light can revert back before month end if the market turn up. 

I am not convinced we are entering a bear market but we are in a significant correction and these indexes are showing signs of weakness that could continue. 

Keep you posted.