Those investors who made money in August should be pleased since the month
turned in the worst performance since May 2010. And the results would have been
much worse for the Dow industrials had the index not had a 7.4% rally with the
Dow advancing in seven of the last eight sessions of the month. But despite the
late-month rally, longer-term studies like the monthly chart of the S&P 500 with
a 17-month moving average show that a sell signal was still issued at month end.
On Aug. 18, the Daily Market Outlook warned of tough times ahead saying, "The
long-term trends have been broken. Markets do change, and perhaps the fall will
bring a new beginning, but currently the trend is bearish and stockholders
should not grab for straws that they hope will bail them out of a bear
market."
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