Monday, July 28, 2014

SPX And NDX Have Topped Out

SGS Market Timer Status:   SHORT 
Short as of close of 7/17/2014

RTS Long Term Current and Past Portfolios

A top has been formed now and large cap indices (DJI, SPX and NDX) are positioned to follow RUT to lower values.  SPX tested its 20 D-SMA on again on Friday.  That was the 8th test of that support for SPX in the last 3 weeks.  After so many blows, that support has been weakened substantially and it's ready to cave in, probably early this week.  A daily close below 20 D-SMA would signal more selling and a very likely test of 50 D-SMA for SPX.

Looking at weekly charts,  since 2009 bottom, every time that RUT has traded at or below its 50 W-SMA, SPX has at least tested its 20 W-SMA.  RUT is about to test 50 W-SMA (1128, very likely this week) again which would suggest a temporary bottom for sell off around 1910ish for SPX

RTS Portfolio is 50% short in IWM, QQQ, SPY (equally) and 50% in cash.   My plan is to add to its short positions (another 25%)  as SPX starts to trade below its 20 D-SMA.

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.