The data that came out today, really helps to clarify the current condition of the equity markets.
All I can say about the Intermediate to Long Term is BUY BUY BUY!!!
While I still anticipate a decline from current levels to retrace at least half of the market rally from the August 16th low, I would have to say that my analysis of a potential 15-20 % correction is stock prices has lost just about all of its merit!!
As you can see by the chart below, The Commercial Traders or Smart Money were massive and I mean massive buyers of equities over the past week. As a matter of fact, their buying was the strongest in over 10 years!!!
These Commercial Investors as we have seen time and time again are always on the right side of the market in equities, so it is very safe to conclude that if the market were to be about to decline 15-20% then we would NOT see such strong buying by these Smart Money Players.
What this tells us is that the August 16th low in the S&P 500 should be the ultimate intermediate term low and that the next major move in the averages will be higher.
I am however, keeping my hedge in place until we complete the short term correction I anticipate, probably in the 4-7% area.
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