C-fund – 50% S-Fund – 50%
This week was a very powerful week in the market and it makes 3 weeks in a row the end of week numbers are up. Thursday I called the official entry after the buy signal was triggered Wednesday. So if you followed verbatim the moves on the daily chart that I use, then got back in higher than you got out. That happens at times because no system is perfect. If you would have been looking at the Weekly or monthly charts, you would have never bailed, not even close. That also happens because it takes larger moves to make things happen on slow moving charts. So what is the point here? No system is perfect but doing nothing is not the answer because I have shown many times how doing nothing like in 2007-2008 is a disaster.
Someone asked me Friday, how do I get in now since I missed the entry and I thought to myself, really? I mean come on, 1 day in the market is really going to make a difference over 10, 20, or 30 years? I think not. So I just smiled and moved on. What I want to show you guys is the first place I expect the market to pause, where we might be heading, and that we are slightly overbought as of Thursday.
So the first item that we should expect to see is the resistance at the last all time high of $1687. This is where sellers jumped in and started selling last time, so you have to expect a pause, sideways movement, grind, and or a breakout. I prefer the breakout. Thursday we hit the upper band showing we are slightly overbought and this might cause price to pullback for a bit. Remember it is just an indicator and not a concrete fact of life. Price could continue higher for days, weeks, and months being overbought if there is demand.
The last item is just a cool fact and technician use them to forecast where price might slow, reverse, or pause. Since we just broke out of the Bull flag Wednesday, we can use the last run as a flag pole to get a measured move. I marked the flag pole and it’s length is $151. The breakout was at $1632 and if you add the two together you get a target price of $1783.
The Small Cap is a step ahead of the S&P500 in that resistance on the last high has already been broken. Target price on the Small Cap is 938.85.
Now let’s think about something here for a moment. Look at the current returns of the S&P500 and Small Cap. 17.81% S&P500 and 21.33% Small Cap. That is pretty incredible and even if we went sideways the rest of the year, this would make for one of the best years in recent memory. So with those forecasted levels on the breakout, where would that take us? S&P500 would surge another 7.5% taking us to just over 25%. Small Cap would also surge 7% to just over 28%. That would make us all happy but can that be achieved? Who cares? I’ll watch the charts and make moves as needed.
Above are bonds and they are still a disaster. Prices are starting to show support but to early to consider a small entry.
Like I wrote on the chart, you could argue that price already broke the CBL. I like my Green CBL so I will leave it there. Plus there is no trend here to speak of like higher high’s or higher lows. So I think I will just stay in the C and S and let the I –fund develop.
So there you have it. Another great week and we have some promising levels to watch. I’m staying in and staying full invested. 50%C and 50%S totaling 100% in.
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