There was not a lot of movement in our indexes this week, but we did have one index help push my setup to the positive for the month of March. For the most part March 2017 has been flat, specially when you compare it to March 2016 were the C,S, and I made 6.59% to 8.24%. We also have one index that fired the first step to a buy, but I still do think I’m buying it. To the charts we go.
Since the highs on March 1st, the S&P 500 has been consolidating price and grinding sideways. This is consider healthy and normal. We need these type of pauses in price when they march updill or downhill for long periods of time. The normal period for this type of grind is normally 15-20 trading days before they begin a move up or down. 75% of the the time they continue in whatever trend has been previously established. So with that in mind, we have been churning sideways for 12 trading days and it is time for expectation of a move toward the middle or end of next week. Currently all is well and we ride the wave.
The Small Cap daily is also in the grind but did a little selling than the S&P. At one point we had what looked like 2 sell warnings. After the trading day Wednesday, all those warnings were cancelled. We still have to watch the Small Cap and little closer because Price, CBL, and 50 day ma are all merging into one spot. So we could get many false signals in each direction and is another reason why to step back and just make our moves based on the monthlys. Based on the monthly chart, the selling point for us is currently sitting at $1134. Current price is $1206. That’s a dramatic fall in prices that none of us want to see. Today we just ride the wave.
Bonds once agan are beginning to show signs of life if you consider price jumping above my CBL life. Volatility is positive and the DMI appears to be turning positive, but I still believe that we are just bouncing at the bottom. Bouncing here could take months or years to resolve itself. Like the Small Cap, price, CBL, and 50 day ma are all beginning to merge at a common point and many false signals could be fired. Looking at the monthly, we have a long way to go to get that buy signal.
I still consider the International in the early stages of an uptrend. Wednesday price just ripped higher off of the short trend line. Thursday and Friday, that upward motion continued but at a slower pace. One has to think that a pause or consolidation here is over due. Either way, we enjoy the gains and ride the wave.
Conclusion: Consolidation when prices run in either direction is normal and all you can do is wait and see what happens. If you’re out waiting to find a spot to get in, these moments in time are normally best. In most cases, the trend will continue. Because of the patient method that I have been using for a year, Friday my account has once again hit an all time high. I’ll continue to ride the monthlys.
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