US stocks have plunged this week from the high of the week of 10/01 which has been the biggest rout since February. Meanwhile, investors remain jittery, to put it mildly, and confused as people try to attach a fundamental reason for the decline mixing in the recent jump in interest rates and the potential harm tariffs could cause tech companies. But our sources overseas are more concerned about politics. The Democrats are vowing to raise taxes and lower health care costs which they created in the first place.

The NASDAQ peaked in August and our model had called for an August high would be followed by a low into this period. So nothing unusual has transpired other than foreign buyers have backed off concerned about what happens if the Democrats take the House. The S&P500 peaks in September and the Dow peaked in October with the dollar illustrating once again the international capital flows are different from domestic.

The interest rates have been rising since the 4th quarter of 2015. To suddenly claim that is the reason for the decline merely reflects the problem that they need to point to something to explain a move that cannot be attributed to anything but the political uncertainty on the horizon.

We will update Tonight on the Private Blog with the specific numbers.

Interest Rates have been on the rise since 2015.75 4th quarter. All of a sudden, the headlines claim U.S. stocks took a dump to close sharply lower because investors spooked by rising bond yields sold equities in all sectors. The Nasdaq Composite Index (COMP) fell 315.97 points, or 4.1%, to 7,422.05, its biggest decline of 2018. The Dow Jones Industrial Average fell more than 800 points and the S&P 500 had its worst day since February as technology stocks went into a freefall.

This really begs the question – Did everyone suddenly notice interest rates? No, the market peak on the target week in the Array of 10/01 so it is simply all about the market getting tired. The vast majority are bearish and the most fascinating thing is what happened to the Flight to Quality? Normally, the stock market crashes and you run to bonds. But if the stock market is crashing and bonds are crashing, is this a completely new type of flight?

We will be providing an update tonight on the private blog.

QUESTION: Hello Mr Armstrong
I have been following you now for a couple of years, since the movie the forcaster, it showed me exactly whats is happening in the world and how little I know about finaces and trading. I am a blue collar worker in Canada with a small pension, how can I or where should I go to learn how to trade? Better yet how to use Socrates or someone who can help me or invest for me?
Your work has opened my eyes and also scares the hell out of me for what is coming.
Please can you help me and the other little guys who not as educated?
Thank you

ANSWER: What you want is not to short-term TRADE but to be a position trader. People who try to trade back and forth usually get caught up in emotions and end up losing money. What you want is to POSITION TRADE for the long-haul.  Here is what happens just using the Long-term Reversals only – not even every single one. Sure, you leave some on the table. The important thing is to reduce the number of trades and your confidence will increase and you will actually make more at the end of the day.

Right now, we are still in this consolidation phase, yet this is still a cycle inversion. We have not elected any Monthly Bearish Reversals at all so you just stay with the trade. The exit point keeps rising as the market rises. You can use the Weekly to Exit after a long bullish run. But for now, just hang tight. We may have the greatest trade on the century knocking on the door very soon.