Looking at the S&P 500 Monthly and Weekly Charts above it is very easy to see that this weeks 1% pullback made no change in the standing of the market. We are still in a very strong uptrend that I want to be part of until proven guilty. My new method of finding trends and staying with them, (The 10 period moving average on a monthly chart), is still a firmly intact uptrend.
After my last entry signal on July 11th, we made a march to $1700 and then made a new all time high $1709. Since that point it is easy to see that on the daily chart that we are starting to churn. Churn meaning that we are range bound between $1676 and $1709. Just this week we had a pivot low and pivot high created side by side. That doesn’t happen very often.
Consolidation after a big run is common. The S&P, Small Cap, Nasdaq, and a few others are up 20% or more for the year and someone somewhere is going to take a profit eventually. Sideways movement is also a good sign that buyers are buying every dip and eventually this could lead to another leg up. I see not urgency to make a move in either direction today based on the current price levels. This is that point in time where you just have to sit tight and see which way she breaks. I’m still looking for $1783 to be reached before this thing really slows or noses back over. Of course we all know that News can sometimes make us spike in either direction, but no one can guess or control that situation.
Small Cap is in the same shape as the S&P 500.
The International Index bucked the down movement this week and pulled off a small gain. So that 20% move I made actually saved me a little money and held my percentage loss to .57% instead of the 1% loss I would have gotten with that 50-50 mix C and S. It is easy looking back in time and say, it would have been great to have moved 100% into the I-fund, but we cannot trade in the past now can we? If you look at the long term monthly chart of the International Index we are still in the early stages of the uptrend, so let’s hope this will continue.
Bonds we have no change. Still bouncing off the lows and churning. Bottom fishing is still approved here if you play that game.
Nothing to me has change over the last 5 trading days and I’ll stand on my current setup until the markets give me a sign that direction is changing. I also use my personal stock trading as a clue on what is happening behind scenes and right now my stocks are rocking. Fully invested in stocks and do not see a slow down yet.
Have a great weekend.
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