What we are looking at above is the number of stocks that are above the 200 day moving average inside the S&P 100 index. After the close Thursday and Friday we had a sharp move back above the go long signal. Anytime you have 65% of the stocks in the S&P 100 above the 200 day ma, that is good. What would make it even better though is if 65% of the stocks were above their 150 day moving average. So where are we? The chart below will show that information.
So, we are peeking above the 65 level and all we need to do is hold at or above 65. You can also see a steady but very choppy climb to that point but no one ever said that the stock market was easy or easy to read. If it was, we would all be rich. All you can do is try and stack the odds in your favor.
As you can see above, early this week the 50 day moving averages were under attack. Now after those big moves Thursday and Friday you can see that we pulled away nicely to the upside. When the red 50 is above the blue 50, we have a stronger move, so it is really hard looking this chart not to be invested in the S&P and or the C-fund. I know if you listen to the news it will make your skin crawl, but if your not listening to the news, what does the chart above say?
The Small Cap index above has been a little more volitile but it to is making a slow accent. Small cap is always going to make bigger moves in both direction so danger and rewards are always greater. Looking at the chart it appears to making higher highs and hogher lows, so you have to follow the trend.
Last but not least is the International Index. We are not making higher highs nor higher lows yet with this index. We did once again rush back through the 50 day moving averages, but I think there is just to much volatility here at the moment. There is also no pattern of an uptrend. Why risk the money here when we have the S&P and Small Cap that look more consistent?
Bonds are still looking strong but your have to see as I do that after Thursday and Friday we might be rolling over. Bonds kind of caught me off guard on this little run, but since about April 9th or 8th, it was a good time to be there. Looking at just the 50 day moving averages, it still a good time to be here. But like I've already pointed out, after last Thursday and Friday, I would be careful. If you out looking in, wait.
Conclusion: Expect Monday the markets to pull back a bit and take some profits from last week. Even though you could argue all the did was recover from all the down days, you have to understand that some didn't ride those down days. There are traders out there that day trade and they will be looking to cash in profits after big days like Thursday and Friday. So if your out of the market looking in, you might want to wait for the next pull back and then get in on the up swing. Same goes for the Small Cap. International is a wait and see and Bonds are wait and see. I do believe based on all that I see that we are at the beginning of another up swing but seeing that it is still in Summer, choppy is likely going to be the name of the game.
No comments:
Post a Comment