Sunday, December 5, 2021

It's Not The Virus, It's The Fed

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday November 19, 2021
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

The new Coronavirus variant, Omicron, is "highly" contagious but early data indicates that vaccinated individuals who were infected show mild symptoms and recover quickly.  More people are now choosing to get vaccinated and that is bullish because chances of an economic shutdown substantially diminishes as more people are vaccinated. 

Selling due to Omicron was done on Fri 11/26, but a  new wave of selling started as Powell came in super hawkish before the congress last Wednesday and another regional president doubled down on his hawkishness last Friday.  Selling very likely continues until the Fed signals a more dovish plan on tapering, quantitative tightening, and the Fed Funds Rate.  In the past, those dovish signals didn't come in until indices had corrected at least 20% from their highs. 

SGS Market Timer

As of the close of last Friday (12/3), the value of SGS was calculated to be -987 and the status of SGS remains SHORT.

S&P 500 Support And Resistance Levels

Support and resistance levels for SPX for next week are shown above.  Last week SPX successfully tested its PUL-2 last Friday, a close below that line would signal significant selling ahead.

My Plan

In light of the new hawkish stand of the Fed, I believe selling continues.  My plan is to close my long positions (except two small crypto positions) sometime this week.


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.