At the end of September, the S&P 500 was over 2900 and nobody was worried. Less than two weeks later, on October 10, I told you that I had moved to 100% cash, writes Mike Turner Friday.

Today, the S&P (SPX) is down more than 9% from its highs and is just a few points away from officially being in correction territory.

And that’s the good news. The Nasdaq (IXNDX), Mid-caps (SP400), and Small Caps (RUT) are all officially in correction territory, each being down more than 10% from their highs. It could get really ugly from here.

So, I have a question for you. Are you still in the market? Be honest, you probably are. Why? Go ahead, I’ll listen.

Now that you’ve given me your answer, ask yourself a question. If I had just said what you said, what would your response be? Maybe something like “Ok, Mike, that’s just an excuse so you don’t have to admit your trade isn’t working out.”

Imagine a different scenario. Wall Street is going crazy and the cacophony is deafening. The noise doesn’t end. The financial media – written, broadcast, digital – is on 24/7. Yet, you’re somehow above it and you can hear everything. There’s some great commentary and there’s some really ridiculous self-serving commentary.

You realize that you’ve become the ultimate observer. You can hear it all and not be affected by it. And you come to the most important conclusion of all.

The only thing that matters is the market. All of the noise doesn’t matter, only the movement of the market itself matters. We don’t know what the market is going to do, but we know with certainty that we can measure what the market does. And with this measurement, we can determine if the market is moving in an uptrend or a downtrend.

If you knew where the market currently is, with 100% certainty, would you still be in the market today? Probably not.

Here’s the market as represented by the ETF for the S&P 500 (SPY). The chart is from this past weekend. The yellow channel is the market’s trend. SPY closed below the yellow channel and below its trend line. Now, what is the market telling you?

chart

SPY might stay below its trend line for just a short period of time as it did in early 2016 or it might stay below its trend line for more than a year and lose 40%-50% in the process. I don’t know. Nobody knows.

So why take a chance? You can always get back into the market when it becomes healthier. But right now, it’s not healthy. The only reason to stay in is because you think the market’s wrong. I’ve got news for you…. the market is never wrong.

I’m planning a special webinar on Wednesday evening, November 7 at 6:30 pm CT to discuss the results of the elections and what it will mean for the markets and, more importantly, your investments. I’m still putting together the presentation, but you can get a head start and register for the webinar. Just click here and we’ll save you a seat.

Don’t forget, the MoneyShow Orlando is in February and I’ll be playing a big role in helping investors get back on track after this latest downward move. For more information, click on the link below.

The Orlando Money Show – February 7-10, 2019

If you’re interested in learning more about how I manage money using the Market-Directional Investing methodology, you can read more here.

Mike Turner: how to measure a market, in a short video.

Recorded: MoneyShow San Francisco, August 24, 2018.

Duration: 4:22.

Mike Turner: Rule 1 of Investing, his new book in a short video.

Recorded: MoneyShow San Francisco, August 24, 2018.

Duration: 3:42.