Which Way Wednesday – Powell has some Splainin’ to Do to Congress

So you crashed the economy on purpose?  

We’ll hear from Chairman Powell at 10am this morning as he testifies to Congress and, since last time he spoke (Wednesday afternoon) the markets collapsed, a lot of people are selling off in anticipation of another horrible scenario. 

The reasoning doesn’t matter too much, what we have is a very clear scenario where we hit our predicted Weak Bounce Line on the nose (S&P 3,780) and we’re being harshly rejected there.  That’s a weak market signal that indicates we will be re-testing the Strong Retrace Line (3,680) and, if we fail that – we’ll be looking at 3,520 as our next support and that then puts us in danger of having to rethink 4,000 as the S&P’s value line and consider 3,600 or even 3,200 as possible downside targets.  

Hey, by the way, does this chart mean you will take Death Cross signals more seriously in the future?  As I was saying, if we think the market has another 20% left to lose – is there any point to sticking with our longs or should we cash out and wait?  We added a few bargain stocks to our Long-Term Portfolio in yestrerday’s Live Member Chat Room as well as our Morning Report (sign up here so you stop missing out) but they were all initial positions, allowing for the possibility of a 20% drop, where we’d be happy to double down.  

Still, managing a whole portfolio like that can be tedious and if say AAPL were to drop to $100 – why would I want to own anything else?  AAPL now IS the Nasdaq – it certainly is the entire Media sector even though media is only part of what they do.  Remember when ABC, CBS, NBC and Fox had all the power?  Those days are gone.  

Sony (SONY) must be wondering what the heck happened as they used to dominate electronics with Walkmen, Discmen and TVs and they had their Film Division (Spider Man, James Bond) and their Music Division (Michael Jackson, George Michael, Pink Floyd) and they…

Provided courtesy of Phil’s Stock World.