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If there is one thing learned about "TA" that will nearly always upset "Mechanical Investing" strategy it is when markets indicate sideways action. Then stop trading.

Strained Again

November 28, 2021
Weekly Market Outlook
By Keith Schneider

As we highlighted last weekend that “something stinks” the nasty odor erupted in the form of a strong sell-off in global markets due to the emergence of yet another new strain of Covid which is particularly virulent. In fact, this was the worst sell off after Thanksgiving in 70 years for US markets.

Considering that Markets have at least a short-term memory, further weakness seems in store at least until our Sentiment and Market Internals get wrung out on the downside or the something emerges that shows the new strain is under control somehow.

Other than that occurring, traditional market stats regarding year strength especially when markets are already strong might be the exception this time around. Most disturbing is the failure of Small Caps (IWM) which has clearly failed a recent breakout which had cleared over 6 months of sideways action.

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