This past week price on the S&P 500 price collapsed below that all important $1870 level that I was betting on to hold. So I reluctenly got out of my C-fund position and ran to the F-fund. I also went hunting for more long range support and found it the same day that it bounced off that level. That level is $1814. It bounced hard enough to create an equal pivot low from 1/20/16. That helped to confirm support of $1814. Long range this support goes back to 1/14/14. So holding this level is so much more important than $1870. A collpase of $1814 will likely drop us another 4.1% to $1739. Volitilty is high but rolling over. The DMI is a strong confimed down trend. Things look grim, but sometimes these signs mean just the opposite that us little guys read. These extreme levels could be calling or saying lows are close. Only time will tell us but we should be watching for quick turns here. Right now in time the only only the CBL buy line and 50 day ma is the only sign I have when to get back in, but I will be looking for an earlier call. I think another retest of $1814 would be an awesome entry point, but that has to develop. I’ll be watching.
The only news I have for the Small Cap or S-fund is that the downtrend continues and no sign of relief can be seen on the charts. See the yellow circle on the above chart. The importance of that is shown more clearly on the monthly chart so let me take you there and explain.
Look at that very long term uptrend line in green. Now look at the yellow circle. See it? This long term monthly uptrend is breaking down. That dates back to 2009. Long term support on this chart is $738. That’s an ugly 14% drop from current price levels. Even though I don’t think we are heading there, it is support. $824 to $812 on the daily chart is a point to look for support on a daily chart but it is short and shakey, $738 is firm. I’ve got nothing for the Small Cap at the moment.
The International index is down. I’ve got nothing.
Bonds just keep grinding higher ever so slowly. Bonus here is that we are not losing moeny and heading downhill. We are firmly breaking out from that down trend on 1/29/15 a year ago. Next week if this trend continues the weekly chart will fire a buy signal. It was within 5 cents week of firing. Something else happened this week in bonds but I have to show you with a monthly chart, so let’s go.
Pivots on a monthly chart do not happened very often and sometimes can take a year of more. This week a higher pivot low was confirm which finally gives us a long term uptrend line that we can use for selling and support. Don’t expect big moves in bonds in one direction or the other, but for the near term it looks like all signs are up.
Conclusion: Bonds and the G-fund is the only that look safe at this moment in time. Volitility in the C, S, and I have been running since August of last year, so one would think that soon things have to turn. Think is a big word here and seeing price reverse is the only thing you can see. So I will stand down until I see an opportunity.
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