Saturday, January 10, 2015

Is A Bottom Near?

SGS Market Timer Status:   NEUTRAL  
Neutral as of close of 12/29/2014

RTS Current Portfolio (2015)
In Cash

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.