SGS Market Timer Status: SHORT
SHORT as of the close of Friday April 8, 2022
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must
Last Wednesdays the Fed announced details for their plan to reduce the Fed's balance sheet (a.k.a Quantitative Tightening, QT). According to that plan, in June Fed's primary dealers are to sell $47.5 billions of Fed's assets that they are holding in trust, in July they are to sell another $47.5 billions, and starting in August, Fed primary dealers are to sell $95 billions of Fed's assets every month.
That is an aggressive QT plan that will force Fed's primary dealers to sell some of equities they had bought using the margin created by assets they are holding in trust for the Fed. As primary dealers unwind their equity positions to meet margin requirements, indices suffer; and that suffering will continue until the Fed is forced to either end its QT or significantly moderate it in a few months due to continued sell-off in equity and bond markets.
SGS Market Timer
As of the close of last Friday (5/6), the value of SGS was calculated to be -1545 and the status of SGS remains SHORT.
S&P 500 Support And Resistance Levels
Support and resistance levels for SPX for this week are shown above. On Wednesday a lower than expected CPI (year-over-year) could caused a monster counter-trend rally. A consensus read (8.1%) or worse, very likely would cause significant more selling.
My Plan
Per my plan, I put another 35% of my cash into SDS last Wednesday. My plan is to stay with my positions for now.
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
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.
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