I'm not an alarmist.
The sky isn't falling. But the same may not be true for stocks.
And I am concerned. To see what I'm talking about, just take a look at the stock charts below. Take a good look at each one.
See if you see anything in them. See if you can see what I see.
Then I'll tell you what I see and what I'm afraid of...
They're all different market indexes. They all look the same. Don't they?
And they're not the only indexes that look this way - check out the Dow Jones Transportation Average and the PHLX Semiconductor Index as well.
Not only do they look the same, but they're all pointing to the same place - a danger zone.
On every graph, on the right-hand side, after the big drop in October, you can draw a pretty straight line under the dips on the right from the middle of December to now.
What is that line? That's "support." Every one of those charts and most individual stock charts look like these indexes. They all have the same support line.
What's the problem?
If they break that support line - if just enough of them break their support lines - they're all going down.
The correlation is frightening.
That's what I'm worried about.
A major market sell-off can happen. We're at that point - we're hanging on to support.
Then again, support can be support. And we could bounce higher and make new highs.
When I wrote this heading into the markets' close on Feb. 2, 2015, after being down triple digits that morning, we went up triple digits.
So far, so good. Support levels are still holding.
However, I'm more concerned about preserving my capital than risking it at this juncture.
Here's what I suggest you do...
Right about now would be a good time to check your stocks, to put down some stop-loss orders, if you don't have them down already.
Now is the time where I like to put on trades that will make money if the markets fall.
We're down with our stops in my trading services - Short-Side Fortunes and Capital Wave Forecast - and we've got some neat positions that will make a ton if the markets do fall out of bed.
And if they bounce off support and head higher, we'll get out of our downside plays, take off some of our hedges, and let our portfolios bask in the sunshine of a rising market.
But, like I said up top, the truth is that I am concerned.
That's all. I told you I'd let you know if I became uneasy with how the market is acting.
I'm saying it now.
Casino Capitalism in Action: The Fed and other central banks printed money and steered it directly onto banks' balance sheets so they wouldn't be insolvent. But the central banks did all they can do a while ago - they're just using ghost funds now. Here's why the time to sell everything is approaching fast...