Mark Twain used to say, “October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July,January, September, April, November, May, March, June, December, August, and February.”
Well, it can be said that Monday is one of the peculiarly dangerous days to speculate in stocks. Followed by Thursday, Friday, Wednesday and Tuesday.
Yes, we are talking about Black Monday of October 19, 1987, when stock markets around the world crashed, with the Dow shredding 23% of its value in one day.
Why?
Today’s stock market finds itself at an incredibly important juncture. 
That is to say, the stock market of today is nearly identical to pre-crash 1987. At least structurally speaking. As the chart below suggests, should the Dow take out February low and its 200 day moving average (located at the same level), there is no saying in how fast the Dow will drop and how low it will go.
Having said that, if you would like to find out what happens next, based on our mathematical and timing work, please Click Here
Now, back to our regular stock market update……
– State of the Market Address:
- The Dow is back below 24,000
- Shiller’s Adjusted S&P P/E ratio is now at 31.59 Slightly off highs, but still arguably at the highest level in history (if we adjust for 2000 distortions) and still above 1929 top of 29.55.
- Weekly RSI at 45 – neutral. Daily RSI is at 31 – oversold
- Prior years corrections terminated at around 200 day moving average. Located at around 19,000 today (on weekly).
- Weekly Stochastics at 38 – neutral. Daily at 13 – oversold.
- NYSE McClellan Oscillator is at -66 Neutral.
- Commercial VIX interest is now 38K contracts net short.
- Last week’s CTO Reports suggest that commercials (smart money) have, more or less, shifted back into a net bearish position. For now, the Dow is 2X net short, the S&P is at 5X net short, Russell 2000 is 4X net short and the Nasdaq is neutral.
Having said that, if you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.
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