As I feared with bonds, if stocks started to rally, bonds would pullback and that is what happened Friday. As dramatic as the price drop looks, you have to remember this is the bonds, so the pullback was only .4 of 1%. Price is still above the entry point but warnings have been fired. The CBL and uptrend has been violated. The 50 day moving average is now under stress and this means that next Monday a sell signal could be fired. So you must watch this index if your invested here.
11 days ago, I really thought we were entering a major pullback in stocks and look at us now. Friday we set an all time trading high and a new all time closing high in the S&P 500 index. Currently we are just a bit over bought which is just a small indicator that price might pullback a bit or consolidate. Price is currently safe and above CBL, Trend, and 50 day moving average. Levels to watch are on the chart. Remember the Bull Flag breakout post with the targeted move that I published here? Could $1735 be in are future?
The Small Cap is also setting new high’s and I have made an adjustment on the chart. The trend line has been adjusted the last pivot low since price has accelerated up and away. I also marked the sell head fake that trapped me for a bit, but like I have always said, can’t count money you never had. I took the re-entry on April 29th and it looks like it was the correct call. Levels to watch are marked on the chart.
The International index the last 2 weeks have kicked butt. 6% with the recent move. I still remember typing or saying when that buy signal was given, I just didn’t trust it and I didn’t take it. So what if I had taken it? My gain would not have 6% because that is the recent move after the dip was reversed when the buy signal was given. So my gain would have only been 2.75% and only if I went 100% in. I know I would have never done that and my move would have allocated 25% max which would only given me a gain of .69%. That chart looks awesome at this point in time and I will milk the International until the next drama moment that we all know will happen sooner or later here. Levels to watch, CBL is $60.45 and a close below $59 would be a sell signal.
So will May 2013 be a winner and break the trend of the last 3 May’s? Who knows!! The head fake in Small Cap is a clue that anything can happen and happen fast. We will just continue to watch price and move when it tells us to move. Right now the only concern is Bonds. If stocks continue to rise Monday, bonds could fire a sell soon.
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