Media reports suggest the catalyst behind the plunge of the US financial markets today was a weak report issued by the ISM non-manufacturing index, which is a measure of service sector activity. Odds favor the mainstream media has no idea what drives the markets. What exactly pushed the markets down is conjecture.The ISM number is a lagging indicator, and when we last had a number this low, we were emerging from recession. The number is usually a prime candidate for backward revisions and I would not trade based solely on this one indicator.
We remain in bearish territory at this time. The emergence of some leadership is required to lead us into a bullish position, and there are some damaged charts out there. Perhaps some favorable election results could provide a catalyst.
Since I might be at the 7-11 getting a big gulp when the bottom is placed, I think down moves like this present dollar cost averaging opportunities, particularly over the long term.
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