Last Friday I shared the 3-pack below…reflecting the following-  NDX 100, Mid-Cap’s and the 500 index were on short-term support and the VIX was hitting falling channel resistance that often had reflected the VIX was overextended to the upside.

For aggressive short-term traders, this situation looked to be a good entry point to go long….with clear cut lines in the sand to close positions out should support not hold. 


Why did I mention Short-term investors?    Keeping an eye on big picture/Macro leading indicators is important too!

3 of the 6 high yield funds below have now broken below their 200-EMA lines, with the other 3 very close to doing the same. 


The majority of these high yield funds DID NOT BREAK BELOW THEIR 200-EMA lines in 2010…This is a macro event to respect and keep an eye on, suggesting that “Capital preservation” remains very important portfolio construction message!

With the high yields reflecting weakness not seen since 2007, should the NDX & MDY break back below their 2007 highs, odds favor the downside action will be very large!

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past