Sunday, August 28, 2016

Again, Selling Very Likely Continues

SGS_LT Market Timer Status:  LONG 
LONG as of close of  July 22, 2016
SGS_LT is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2016)
Past Long Term Portfolios (2008-2015)

Longer Term Outlook

Longer term (weeks to months), after a quick sell off in the next couple of weeks, SPX very likely rallies until the US presidential election as Clinton pulls ahead of Trump in polls.  I still think that there is a chance (20%) that Trump quits the race as it becomes mathematically impossible for him to win the election.  Once the probability of Trump winning the election falls below 15%, we should see Trump try to weasel out of the election so he wouldn't face an embarrassing defeat on November 8.

On Friday, SPX tested the lower channel line of its bear flag formation
(shown in above weekly chart in pink).  Chances are high that selling continues in the next of couple weeks and as SPX tests its DTL (13 EMA) around 2150.  A close below DTL this week would signal more selling as SPX tests its PUL-2 around 2100.

Shorter Term Outlook

No change since last week, indices are still overbought.  Chances are good that SPX sells off this coming week to test its 50 D-SMA around 2150.  Should selling gets panicky, there is a good chance that SPX drops down to 2120 intraday.

My Plan

My plan still is to open long positions in SPY.  I'm planning to open my first of three long positions in SPY sometime this week as SPX sells to tests its 50 D-SAM around 2150.

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 informational  purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.