Sunday, March 5, 2017

Selling Very Likely Continues

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

SGS continued to put in lower highs last week, signaling that the sell-off that started last Thursday very likely continues.

Two things could happen now: 

  1. SGS continues going lower until it crosses and closes below zero line. A close below zero line would turn SGS from LONG to SHORT.
  2. SGS turns back up and closes above its DTL and ADL which would signal that the correction is very likely over.

Short-Term (hours to days) Outlook

Shorter term, SPX is overbought.  Chances are good that SPX continues going lower this coming week and tests of its D-DLT around 2360 and AUL around 2350.

Long-Term (weeks to months) Outlook

Longer term, chances are good that SPX continues to sell-off and test its AUL around 2340 sometime this coming week and then its W-DTL around 2310.

I think if the Congress enacts Trump tax plan, military spending and repeals ACA then we should see a significant rise in indices despite rising interest rates; however, amid current controversies and scandals surrounding the Trump Administration, chances are low that any of that comes to fruition.  Hence, chances of additional gains in indices are low.

My Plan

I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its ADL. If SGS continues to go lower and turns short, I would start opening short position in SPX by buying SH.

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.