I could take many days talking about my daily charts and how I make my decisions on my moves, but it boils down to a combinations of items. I use a Count Back Line, CBL and Moving Averages, 50 day, and trend lines. I try to give either the uptrend or downtrends enough room so I do not knee jerk in or out. Kind of like the Monthly chart, but a lot more work. So let’s see where we are today.
Stock Market in USA closed Monday, September 2, 2013
Since the high on August 2 the S&P has been slowing making lower pivot high’s. We currently have 2 lower pivot high’s and with that you can see the red line setting up a new short term down trend. You can have a short trend that is opposite the Intermediate and Long term trends. They are now on a collision course that will come together no later than 9/12/13. See the W1 and W2, those were are first and second warnings that trend was changing and lookout. The last link to the puzzle is the short term uptrend that is about to be broken. If we close below $1626 next week and then follow it up with a down morning the following day, I will run to G.
It’s starting to get pretty ugly here and with Syria news, this could get worse. If we bust through $1626, the next major support will be $1557. Are we over sold here? It’s leaning to the over sold territory, but it is not extreme. I also believe we are due a pop to the upside, but not sure with that news lingering overhead, that is going to happen. I will be watching really close Tuesday morning.
The Small Cap is in the same exact shape as the S&P 500 with the exception there is actually more room for downward pressure before bailing is required. $850 is the last stand line. The lower pivot high’s need to stopped soon.
The International Index or I-fund has turned into a trap. A disaster that I will bail from come Tuesday 11:30am unless we get a pretty large reversal of 1/2% or more by 11:30am. There is just nothing good here and I should have called the Sell 8/27/13 and bailed on the 28th. So once again, I kick myself in the ass for not listening to my own system. The only thing I can hang my hat on is the fact that the monthly chart, I talked about in part 2, is still a buy based on the last trading day a month rule. I look at that chart above and when that channel broke Friday, which is not part of my rules, I was disgusted. I’m glad only 20% is invested here.
Choose your poison, but Mark will more than likely run from I to G or F come Tuesday. I will post prior to making that move.
I still see no real reason to invest in bonds unless you have a very long point of view and or bottom fishing. The bright green line represents what I believe needs to be broken before it is worth while. $107.53. A close above that level and maybe a toe in the water. What is interesting here is that the 50 day moving average is squeezing down on price. I could also draw and official CBL line and a orange down trend line using pivots and we have a true point that would be super for bottom fishing with rules. That level would be $106.85. So you can see we are close to collisions to the upside on bonds as we are on a collision course to a possible downside in stocks.
The next few weeks and days are likely to be gut wrenching and some of will make a lucky decision to be either in or out. I will wait for those levels to completely break down or up before I make my move.
As you can tell, life is a lot more calm using the long term monthly charts, select it and forget it for a month. The daily charts are time consuming and gut wrenching. Consider yourself enlightened. Now choose your poison.
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