I know a lot of you listen to news and watch TV to make decisions, but I just can’t do it. I already know that it makes my mind even more cluttered. I can petty much look at a chart and tell you which way we are currently heading, but what I can’t tell you is which way we are heading tormorrow or the day after. Sometimes we get lucky in our decisions and sometimes are decisions are just a day or two off. Last year that was me. A day or two here or there and I would have ended the year almost even, but instead a 7% loss. Cry about it? Nope, moving on because this is a life time function. So let’s take a look at where we are and what the sentiment in the market is telling us.
The S&P 500 is currently in a sideways churn which has formed a wedge that gives no clue on direction of break. Price is below the 50 day moving average which is an indicator that prices should continue lower. The last selling CBL line in red dates back to October 27th. That alone should tell you that we have done nothing for 3 months. A normal healthy market would see the CBL line move up and the market rises. Nothing!! just warnings and criss crosses back and forth through the CBL. Today there are 2 warnings to say a sell is upon us. See the green uptrend line? That is the last line of defense and if we fall through that, the S&P 500 is an out right sell. I do not see anything confident about direction. It is a wait game. So the question is, do you wait out of or in the C-fund. The weekly chart has been a buy for 2 weeks but just barely. Monthly it is also a buy just barely. So there is 2 positives to help you decide on whether to invest in the C-fund.
So CNN has a market sentiment chart and how you read it is this. Fear in the market means that we are heading lower but it also means to the pro’s that it is likely the best time to buy. Greed means it’s a time to buy but to the pro’s it is normally a time to take profits or sell. Today we sit right almost right in the middle which basically says exactly what the S&P 500 is saying. I have no direction. You can find this Fear & Greed chart but clicking HERE.
Now something a little old that I dug out from stuff I used in the past. Knowing how many stocks are above the below the 50, 150, 200 day moving average gives you and idea of market strength. Being below 40% is not good and being above 60% is great but an eventual pull back is likely. Somewhere in the middle depending on it’s current direction gives you and idea of where we are heading.
Stocks above the 50 day ma is shaky at best. But, looking at the last few weeks, you can argue that we are heading back up. So even though we are below 40% today, the current trend indicates that during next week we could be in the zone, 40% or above. Let’s give this a positive hint.
Stocks above the 150 is flat, below 40%, and indicating no direction. So this is a negative.
Stocks above the 200 da ma is flat. There is no indication of direction and it sits right on 40%. Neutral. So looking at these 3 indicators, once again you have to come away with the fact that there is no real direction or a hint on which direction it might go. This is a correction to the above comment. I put the wrong chart up and the new chart says we are not in a long term uptrend but a drifting lower with no strentgh in stocks. So this is negative.
The Small Cap is also a sideways chart. 2 sell warnings are current we are only a 12 points away from an all out sell. Weekly and monthly the charts are still a sell. Nothing positiive to take away from this either.
The International is a sell on all 3 levels, daily, weekly, and monthly.
Bonds are also a sell on all 3 levels, daily weekly, and monthly.
Conclusion: Today the market is neutral and it has no direction. Looking at everything above it would appear that we could sink lower just because that is the basic trend of the majority of the charts that I show here. So if I was going to start investing today I would only invest in the C-fund.
Monday monring I will make a shift in my distribution, 70-C & 30-G
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