The US Stock futures are down more than 200 points. With Europe declining sharply, tomorrow might be a bad day for the US financial markets. Understand, Survive and Thrive's Trading Algorithm generated a Sell Signal on Friday at 1177. Thus, closing the long trade for 2.6% profit. Overall the UST trading Algo was up ~+9% in August (please review the website).
After Friday's decline, the weekend market analysis brought forward a uniquely different market outlook. Markets have changed their trend from up to down. In order to better understand these developments, Inflection Point Model was re-run. Note that IPM has been 95% accurate in predicting market turns (Please review the website for details).
The most important aspect of an analyst's performance is to listen to the message of the market and to adapt appropriately. According to the two models, the next turn date is scheduled for September 20, 2011 (+/- 4 days). Since there are few days to the next turn date, it is highly likely that we will see the bearish scenario (new lows), come to fruition. There are two turn dates very close to one another. This suggests that either we will see a double bottom or we will see a sharp but short rally into the second turn date. Interestingly, this time frame also coincides with "Options Expiration Week," Federal Reserves' special 2-day meeting where they might announce QE3 and the Fall Solstice (a significant time for market turns).
Overall, bottom picking in a downtrend is hard and can result in losses. One of the paramount rules of the trading algorithm is to very rarely undertake a counter-trend trade. Therefore, we will look for shorting opportunities over the next few days.