Top Line: The stock market dropped hard on Friday to a new low for the move in the major indexes that we follow. This is the start of a major drop in the market. Whatever rallies the market has should be sold.
Friday's sell off seemed to be a shocker to all of those who thought Wednesday's sell off was a good "buying opportunity". To be clear, the good buying opportunities were last March when the SP500 was trading under 700, not now when the index is near 1100. After the index has rallied 50% in about six months, it's Not time to buy.
The volatility indexes we follow traded above 30 and the VIX actually closed above 30. This should be a glimpse of the future when theses indexes jump to the levels we have seen over the past year and possibly higher.
We have been out of town this weekend and it's late so we will post again on Monday evening.