Sunday, October 21, 2018

Selling Very Likely Accelerates

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 rebound rally from short-term oversold levels on Tuesday and Wednesday ran into strong selling on Thursday and Friday.  SPX gained only half a point for the week.  That is quite bearish and I expect selling to resume on Monday and continue at a faster pace.

The upcoming mid-term election is critical. There is a good chance that Reps lose their majority in the House but if they also lose their majority in the Senate, indices would sell-off significantly and lose most of their gains since November 2016.

SGS rebound slightly last week but on Friday it turned down and put in a lower value.  SGS is now well entrenched in the "SHORT" territory.  That signals more selling ahead, or at best a sideways move for the major indices for the next couple of weeks.

Supports and resistances for SPX for the upcoming week are shown above.  Chances are high that the selling that started on Thursday continues this coming week.  For SPX a test of its TLS around 2630 is very likely.  A close below that level this week would signal a high likelihood of more selling to test February lows around 2530, probably by late October to early November.

My Plan

Per my plan I opened my first of two SDS long positions on Thursday.  My plan is to open my final long SDS position 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