The S&P 500 daily chart above is currently a thing of beauty. The last sideways churn lasted for the first three weeks of December and came to an end 12/18. From that point, we came screaming back into the green. We were down as much as 1.7% on the S&P and as of the close the Friday, we are now up almost 2% for the month. I do not see anything in this chart today that would indicate a slow down, so I will ride the wave.
Small cap is also rolling and there is nothing to do here but ride the wave and wait for a bailout signal.
So here we are looking at the International Index daily and the one index that has caused me so much heartburn the last few weeks. I was within minutes of pulling out of the index a week ago just out of pure emotion. I held the line based on the charts and I got my reward. The I-fund was up 2.39% last week and erased all the warnings for a bailout. Not only did it erase those warnings, it broke out the top of the bullflag. Now I can do the math and use the past data to come to a target for a move up from here. Based on the data we should push upwards of 4.42 points taking us just over $70 or 6% higher. Once that point is reached, you can expect either a selloff or more sideways churn similar to last one. What is more important than all that measuring stuff, is the fact that we had a great reversal and all warnings are off. Now we just sit back and ride the wave up.
If you were bottoming fishing Bonds recently, you got another smack in the face from Bonds. This week price broke down below support and closed below that support twice. The short term down trend is still working. At the current closing price if the month was to end now, would create another lower pivot low on the monthly chart. This is just bad all around and if it was the C, S, and or I funds, I would be riding in the G. I just cannot say it enough, I see no reason to invest here.
Conclusion: I hope you enjoyed the Santa rally that took off on the 18th of December. Looks like we will end the year north of 20%. The C, S, and I are all buys and if your already in, sit back and ride. This show will end eventually but until it does, why not ride it into the sunset. The charts should get us out near the top, but never the top. Whoever makes that call or move is just lucky.
Tuesday will end the month and year and I will post all the numbers as soon as I can put them all together. Long term investors, it will be time once again to look at the monthly charts and make decisions. I will post my monthly thoughts as soon as I can.
Let’s hope 2014 is as nice as 2013.
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