Weird

A normal part of my routine when I wake up in the morning is to go to the Yahoo Finance World Indices page. Every Asian market was down last night (the last time I looked before I went to sleep Kuala Lumpur was the lone holdout) and every European market is down this morning.

This is clearly a washout of some sort with an extreme in negative sentiment. For me this reinforces that this is more about sentiment than fundamentals. To be clear the fundamental environment is not great but I don't think its as bad as the chart action would have us believe.

Of course I could be wrong and/or the market could go much lower but this feels more like a bottom of some sort than a top. Usually money flows into stocks somewhere. That no market is up is weird and that every major market is in an ugly downtrend is kind of weird too. Far from unprecedented just a little odd.

I am thinking that if I have to start taking defensive action next week I think I will start by selling just a couple of higher beta names and adding a little more inverse index fund. If I take action at 1150 on the SPX and 1140 turns out to be the bottom I won't have caused complete tumult in client accounts.