If the cash S&P 500 index (SPX) is slated to close below 4350 in the last 5 minutes of trading, our stops will have triggered. Accordingly, the Founders Group will liquidate all positions for a small loss and move back to 100% cash.
We would place the Navigator Swing strategy back to 100% cash as well,. We would then treat the recent buy signal aa merely predictive of a brief short-covering rally.
Regardless of the stops, we will keep an open mind as developments unfold. We are still targeting the end of October/early November as the potential end of the correction.
It is a bit surprising not to see another attempt to test the top of the range before then, but we won’t argue with the market. If stops are triggered, perhaps the supply disruptions combined with vaccine-related labor dislocations are exerting significant and unanticipated pressure on the fundamentals.
A.F. Thornton