Sunday, February 26, 2017

Indices Are Overbought - A Correction Is Coming

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


SGS timer continued to put in lower values last week as SPX marched higher.  The divergence exhibited by SGS points to a high likelihood of a sell-off this coming week.  I'm waiting to see if SGS goes lower early and possibly crosses its D-DTL and closes below it.  That would be bearish and it would be prudent to close long positions.

Short-Term (hours to days) Outlook

Shorter term, SPX is overbought.  Chances are good that we see a sell-off this coming week and possibly a test of D-DLT around 2350 and AUL around 2330.

Long-Term (weeks to months) Outlook

Longer term, chances are good for SPX to sell-off to tests its AUL around 2320 sometime this coming week and then continues its sell-off to test its W-DTL around 2300.

My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction unless SGS drops dramatically in the sell-off.

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

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.