Weekly Update

LONG TERM SIGNAL: First, the good news...the long term trend is still up and there was some encouraging price action to support that last week. Take a look at the attached weekly chart of the SPY. The market sold off early in the week but then rebounded substantially to close higher.



SUGGESTION FOR 401-K: The bad news is that last week was not enough to convince me that we've reached a market bottom. What typically happens after the type of sell off we've recently experienced is what happened last summer (see chart). This was the last time there was a large weekly sell off below the mid line of the price channel (dashed line). As you can see the market drifted lower for several weeks and didn't establish a new buy signal in the long term direction for 17 weeks. In my opinion there is not enough to suggest a market bottom has occurred. My 401-K money stays out for the time being.

Hope you all have a great week. As always, any feedback is appreciated.