Sunday, May 7, 2017

Volatility Is Returning

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

Generally speaking, things are pretty bullish and indices could go up another 10% to 15% from here before we see a sizable pullback.  There are signs, however, that point to no or limited advance in indices.  As shown in the chart above, SPX challenged its recent all-time high (2400) in the last couple of weeks twice but both times on a shrinking number of news highs s and expanding number of new lows.  That is a classic bearish divergence.

SPX unsuccessfully challenged its all-time high last week again. I expect another volatile week ahead and a possible test of its TUL and PDL-0 around 2365 and 2340, respectively.

My Plan

My plan is to open my first long position of three in SPY and QQQ sometime early on Monday.

SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: 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
TLR: Trend Line Resistance   TLS: Trend Line Support

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.