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The YoYo on the Escalator

Price action on stock and other markets tend to act like a yoyo on an escalator. Imagine that you're on the up (or down) escalator playing with a yoyo. The up and down motion of the yoyo is the daily action of prices. The escalator is the trend. 
Monday began with the largest year-to-date drop (-767 on the DJIA) in the stock market after the Chinese pushed the yuan to its lowest value compared to the U.S. dollar in more than a decade and equities kept falling from there. At one point in the first trading day of the week, the Nasdaq was down 4.2%. 
Things calmed down Tuesday (DJIA +312) after the Chinese central bank signaled it would keep the yuan from falling much further, only for the Trump administration to declare that it considered China to be a currency manipulator. Dovish moves by central banks in Thailand, New Zealand, and India roiled markets.
But a rise in U.S. Treasury yields seemed to indicate that recession fears were less than deeply-seated. And indeed, by Friday's open the S&P 500 and the Nasdaq were, improbably, in slightly positive territory for the week.
The context that began the week – a dovish Fed, an unresolved and widening U.S.-China trade war, and indications of slowing global growth – is effectively unchanged. And it seems that context is likely to to produce modest declines punctuated by fleeting moments of panic like Monday. 
So are we on an up or down escalator right now? Looking at a chart of the SPY, which tracks the S&P 500, short-term we're going down, longer-term we've stepped off the up escalator and are deciding whether to go down or up. If you've already gone to cash, I'd stay there. If you're still invested, you might consider selling some weaker investments, taking some profits, and just waiting. The dark blue line in the chart below is the 50-day moving average. You can use it as an indicator of the trend. 
Also, another indicator i use the the Investors Business Daily's Market Pulse, which is "market in correction." Like Warren Buffet, who currently has record-level cash reserves, it might be prudent to also be in cash for now. 
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