Sunday, October 14, 2018

Market Predicts Defeat For Reps If Selling Continues

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

The monthly chart of SPX is shown above.  As highlighted in the chart, in the last 25 years, SPX corrected significantly (15% or higher) when it had traded and closed below its monthly Dynamic Trend Line (DTL, 13 M-EMA) for two consecutive months.

Last Thursday, SPX tested its DTL on its monthly chart at 2710.  If selling continues and SPX trades and closes below 2710 for October, there would be a good chance that selling continues for the rest of year, especially if Reps lose the Senate in the upcoming mid-term election. 

SGS declined substantially last week, signaling more selling ahead.

Supports and resistances for SPX for the upcoming week are shown above.  Chances are high that the rally that started late last Friday continues on Monday and Tuesday as indices retrace back 40% to 50% their losses.  For SPX, I expect to see 2820 to 2840 before selling resumes.

My Plan

Per my plan I closed my SDS long positions on Friday.  My plan is to open new long SDS positions sometime early this week as SPX resumes selling to test 2710.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)

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.