The overwhelming bias in both the domestic and international equity markets right now is to the downside. Sure, there have been a few nice up days over the past three weeks, but those short spurts of buying have been upstaged by the wider bearish trend. The overall downward slide in stocks since mid-June now has caused the phenomenon known as the “black cross.”

The black cross occurs when the 50-day moving average (blue line) falls below the 200-day moving average (red line) (see chart below). This is a definitively bearish development for stocks, and it is this blackened technical environment that has me so concerned about what’s next.

In my opinion, the jury is out as to whether we are going to see better economic conditions in the second half of the year. On the plus side is the coming of what I expect will be a solid quarter in terms of corporate earnings. Manufacturing data have been strong, and corporate balance sheets are in pretty good shape. On the downside is that persistent unemployment problem, a weak housing market and a lack of consumer confidence.

Until we get a solid read on the direction of the economy going forward, I expect to see sellers in control of both domestic and global markets. That means you have to be extremely cautious here with your money. It also means that cash and cash equivalents are still the safest, best places to be with your money. Sure, you aren’t getting much interest, but you also aren’t subjecting your money to any market risk -- and that’s a winning proposition in my book.

If you’d like to find out more about when to move your money into cash, and when to put that money back into the market, then I invite you to check out my Successful Investing advisory service.

We’ve been keeping investors just like you out of harm’s way for more than three decades with our proven trend-following Fabian Plan, so isn’t it time you put the power of the Plan on your side?