Sunday, November 22, 2015

Breadth Indicators Are Deteriorating

SGS Market Timer Status:   LONG 
LONG as of close of 10/23/2015
RTS Current Portfolio (2015)
RTS Past Portfolios (2008-2014)

SPX rallied nearly 4% last week, but everyday breadth indicators deteriorated.  Unless and until at least three of five major indices (DJI, DJT, NAZ, RUT and SPX) take out their all time highs, chances are high that the rally since late September lows is nothing but a counterrend rally.

Bull Case:

A daily close above AUL-1 would signal that the sell off is over and SPX is on its way higher to new highs.

Bear Case: 

A daily close this week below 2020 for SPX would signal a high likelihood of a test of 2000 level.  A daily close below 2000 would signal more selling ahead to test September and August lows.

My Plan:

I am in cash now and planning to start opening long positions should SPX take out its all time high (2134.72) or opening short positions should SPX close below 2000.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend 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.