Monday, January 16, 2017

A Classic Case Of "Buy The Rumor - Sell The News"?

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

The rumor is that the Trump presidency is going to be great for the US stock market.  He and the Congress are going to get rid of tons of regulations, give everyone a substantial tax cut, create millions of new jobs, pure billions if not trillions of dollars into our military and infrastructure, balance the budget and reduce the national debt.  The news might be that the new administration would find itself drawn into many controversies, scandals, conflicts and become totally paralyzed.

Longer Term Outlook

Chances are good that SPX sells off to test its 13 W-EMA (W-DTL) sometime this coming week.  A close below W-DTL this week would signal a high likelihood of trend line (PUL-2) and price support around 2180. 

In all minor sell offs since the election, I have not seen any signs that Big Money was unloading his long positions in equities.  I wonder if that is going to change after Trump takes the White House.  If Big Money hangs on to his long equity positions as SPX sells off to test supports, then the sell off would be a good buying opportunity.

My Plan

I'm planning to stay in cash and watch the action from the sideline for another week or so.

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.