I don't know if a bottom is near. Maybe what's happening now is nothing but a healthy correction in our almost six year bull market. Here are two scenarios that I'm considering:
- Bear Case (70% imo): SPX sells off early this coming week to test support at 2020. A daily close below SPX 2020 would signal a move to test strong support at 2000. If SPX starts to trade below 2000, I believe chances are good that SPX sells off significantly, maybe around 10%, in a few weeks.
- Bull Case (30% imo): Support at SPX 2020 holds and SPX rallies to close above its 50 D-SMA and its PDL. SPX continues higher to put in a new all time high.
As posted on my FB page, I did not open any long positions last week as I had planned. I'm in cash and for now just watching indices from the sideline.
SPX: S&P 500 Index
DJI: Dow Jones Industrial Index
DJT: Dow Jones Transportation Index
NAZ: NASDAQ Composite Index
RUT: Russell 2000 Index
OEX: S&P 100 Index
NDX: Nasdaq 100 Index
D-SMA : Daily - Simple Moving Average
D-EMA: Daily - Exponential Moving Average
PDL : Primary Downtrend Line
PUL: Primary Uptrend Line
ADL: Active Downtrend Line
AUL: Active Uptrend Line
DTL: Dynamic Trend Line
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.