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Lance Roberts, Chief Investment Strategist, RIA Advisors
After having been in the investing world for more than 25 years from private banking and investment management to private and venture capital; Lance has pretty much “been there and done that” at one point or another. His common-sense approach, clear explanations and “real world” experience has appealed to audiences for over a decade. Lance is also the Chief Editor of the Real Investment Report, a weekly subscriber-based newsletter that is distributed nationwide. The newsletter covers economic, political and market topics as they relate to your money and life. He also writes the Real Investment Daily blog, which is read by thousands nationwide from individuals to professionals, and his opinions are frequently sought after by major media sources. Lance’s investment strategies and knowledge have been featured on CNBC, Fox Business News, Business News Network and Fox News. He has been quoted by a litany of publications from the Wall Street Journal, Reuters, Bloomberg, The New York Times, The Washington Post all the way to TheStreet.com. His writings and research have also been featured on several of the nation’s biggest financial blog sites such as the Pragmatic Capitalist, Credit Write-downs, The Daily Beast, Zero Hedge and Seeking Alpha.
Over the last couple of weeks, we have been discussing the ongoing market correction. As we stated last week:
“As shown in the chart below, we had suggested a correction back to previous market highs was likely but could extend to the 50-dma. So far, the correction has played out much as we anticipated.”
However, we also said: “However, while we expect a rally next week, due to the short-term oversold condition of the market, there is a downside risk to the 200-dma, which is another 5% lower from current levels. Such would entail a near 14% decline from the peak, which is well within the historical norms of corrections during any given year.”
On Friday, due to the “quad-witching options expiration” (when all options contracts for the current strike month expire and rollover), the market gave up support at the 50-dma, as shown below.
The good news, if you want to call it that, is the market did hold a previous level of minor support and remains oversold short-term.
As such, the break of the 50-dma must recover early next week, or it will put the 200-dma into focus. That is currently about 7% lower than where we closed on Friday.