The last two weeks in the stock market has been hard to stomach, unless you are content looking at the yearly gains. I am, but I’m human and I hate giving those gains up. But I worked to find my rules and the only time I get in trouble is when I break my rules. So I will ride this wave down until it convinces me to bail.
At the close Friday we had a light. It’s a glimmer and I will take it. First I want point out the gray box where prices indicated that we were oversold. A rebound was due. Thursday and Friday prices started to reverse and by the close Friday, we had a pivot low. We also closed above the 50 day moving average. These Indicators are important and we should have follow through to the upside from here. Guaranteed? Not a chance, but the odds are stacked in favor to the upside. Just in case prices fall and these indicators fail, the level to bail will be $1619 – $1624 depending on which day of the week price crosses the uptrend line. This coming Friday will also be the last trading day in August and we have some ground to makeup to make this a positive month. We need the S&P 500 to get through $1685 to make August a green month. We are currently sitting at $1663.
Small Cap made the best progress this week. Not only did it create a pivot low, it marched strongly above the 50 day moving average. Then on Friday it recaptured the first warning level CBL that was broken 8 days prior. The Small Cap is also pretty close to being positive for August. Just in case price do tank, the bailout point for the small cap is $848 through Friday.
The International Index also followed along creating a pivot low. Price also closed above the 50 day moving average and we are now able to draw a more realistic short term uptrend line. The International Index is a little disappointing when you look at my entry signal, but for the month of August it is up just over 2%. I still think my entry signal here is in the early stages so I will hang on to this position.
Did you read a common theme this week? Pivot low!! We need higher pivot lows in order to show an uptrend. I wrote a post awhile back about pivots and how they are created and you can read that HERE. The Stock market and the index that make them up have been shaky this month, but not enough to make me bail and these pivots may be telling us it’s time for another up leg.
I’m holding my 100% in position for now and will watch levels closely. Pivots could be used as another entry point for those that missed the last entry call on each index.
Hope all had a great weekend and here’s to a good week in the Stock Market next week.
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