In last weeks blog post I made mention that I thought there was a good chance that the S&P 500 and Small Cap would hit new highs. Both indexes closed Friday at all time highs. I also mentioned that the International really needed to get through that resistance, and let’s see what happens. Well nothing happened and we are still waiting for a breakout or crash with the I-fund. Bonds, did make a surprising move. So let’s get to the charts.
The S&P 500 made new highs Thursday and Friday and managed to hold those highs into the close. Volatility is still low. The DMI has moved to even more positive signal. I expect that we might hit another high next week, but it also would not surprise me to see a pause or a little profit taking. Nothing to do here but ride the wave.
The Small Cap index also made new all time highs Thursday and Friday. DMI is still a bit shaky looking but is positive. Nothing to do or say here but to ride the wave.
The International index was a disappointment last week. Right out of the gate, the price drop Monday and not much of anything Tuesday led to a lousy start. Wednesday through Friday things picked back up but all the International managed to do was to get back to the resistance level again. No breakout but on the positive side, no crash. Volatility and the DMI are positive, so maybe next week we will finally get a breakout and follow through to the upside. Monthly, we are still a buy, so we watch cautiously and hope we get something started here.
Bonds actually fired a daily buy signal Wednesday after price crossed above the green CBL and 50 day moving average. So if it held Thursday, Bonds would have been a daily buy. It failed and followed through on that fail again Friday. I do expect a buy signal to be fired and confirmed very soon because the moving average and CBL is at basically the same level. The only thing that I see stopping the buy signal is if price suddenly noses over again. This base that has formed in Bonds started around November 18th, 2016. Not sure the buy signal will hold long even if it fires, because volatility is high and the DMI is a mess. I’m staying out.
Conclusion: We ride the C, S, and I. Bond will likely fire a daily buy signal very soon, but I do not believe it will hold.
Make someone smile this week. It will do your heart good.
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