Sunday, September 3, 2017

Critical Week Is Ahead ... SGS Is NEUTRAL

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of September 1, 2017
SGS is a Long-Term (weeks to months) Timer

SGS advanced last week, crossed its DTL and turned positive. SGS is NEUTRAL as of the close of last Friday.  If SGS remain positive and above its DTL by the close of this coming Friday, then it would turn "LONG".  

The status of SGS changes only on a Friday in order to minimize "whipsaw" that is associated with a trend following timer.

Last Monday night when SPX futures were down 20 points, it looked like that all indices were in for an extremely ugly day on Tuesday and the start of a couple of weeks of heavy selling.  SPX gapped down at the open on Tuesday, it started to head lower, but then it rocketed back up and continued to rally for the next four days on the back of short covering and dip buying.

As of the close of last Friday, data below shows how far major indices have retraced their recent sell-off from their all-time highs:

SPX: 86% of its -3% sell-off
DJI: 76% of its  -3% sell-off
DJT: 51% of its -8% sell-off
NAZ: 96% of its -4% sell-off
RUT: 62% of its -7% sell-off
OEX: 85% of its -3% sell-off
NDX: 106% of its -4% sell-off

It is interesting that the two indices (DJT and RUT) that sold off the most have had the least retracement.  This is not indicative of a healthy bull market in my opinion.

My Plan

Per my plan, I opened my second and final position in SDS last Tuesday at the open.  Now that SGS has turned NEUTRAL, my plan is close my SDS positions sometime this coming week.  Should the battle of words between the two top narcissists of the planet earth escalate and indices start to sell-off significantly on Tuesday morning, I would keep my SDS positions.

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    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance 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.