My Bear Flag

I have mentioned here several times that one of my early warning signals of a potential upcoming bear market is looking at the 50 day ema vs 200 day ema of the IWM. I say this as in the 2008 bear market, it dropped off well in advance of the broader indices.

I found a great chart today that highlights my point.

http://charts.stocktwits.net/production/original_22924996.png?1400029938

Canary In The Coal Mine

Notice that in the bear markets of 2000-01 and 2007-08 that the IWM started going down, while the S&P was actually still going up, or at least was flat.  Of course in both cases, the S&P finally succumbed to gravity.  So hopefully this illustrates why the IWM is my "canary in the coal mine" for my overall portfolio.

CSCO Up After Hours

Readers may recall I sold all my CSCO in my dividend portfolio back in February post their year end earnings.  That was hasty (not unlike my sale of INTC).  But I did buy CSCO for my kids college funds and I added in May 6th to my MFI tranche.  Expectations were so ratcheted down that they are up after hours.  Every pundit I saw on TV said they would be down this evening. Another reason not to listen to pundits (Cisco Demonstrates Solid Execution in Q3FY14).

Hopefully, that will help tomorrow as today was a drudge day - down about 1%.