CORRECTION CONTINUES

THE TRENDS:  Both the long term and intermediate term trends remain up although the intermediate term trend is undergoing what I believe to be a "normal" market retracement.  Last week I mentioned that if another up leg is in the offing, the correction should stop in the 142-144 area.  This week the market closed down for the 2nd straight week but closed at 143.97.  Next week will tell us a lot about the health of the intermediate trend.  If we get a weekly close below 142, there is a very high probability of a move lower, which would flip the intermediate term trend down.

WHAT I WOULD DO WITH LONG TERM FUNDS:  If I were in mutual funds since the last buy signal, I would stay in as the trends are still up.  For self directed IRA's I would stay in an SPY position or call options on the SPY but might sell off 1/2 of my position just to take profits off the table.  Have a great weekend everyone.

CORRECTION UNDERWAY

THE TRENDS:  Both the long and intermediate term trends remain up.  However, as you can see from the image of the weekly SPY, this week closed lower than last week.  It is not unusual to see at least a one or two week correction after such a strong up move.  If this is a normal correction before another up leg in the market, I would expect the retracement to end somewhere in the 142 - 144 area.  The 142 level is an especially strong support level as it represents the high made in April and the 10 week moving average is just below it.

WHAT I WOULD DO WITH LONG TERM FUNDS:  For now I would remain in.  Until the market tells me otherwise this looks like a normal bull market correction.  However, I will be watching the 142 - 144 level closely over the next couple of weeks.  If the market does decline into that area and then bounce, then there is a high probability of another leg up.  Have a great weekend everyone.

ANOTHER STRONG WEEK

THE TRENDS:  Both the long and intermediate term trends remain up.  After last week's breakout above the April high, this week closed even higher, which is very bullish.

WHAT I WOULD DO WITH LONG TERM FUNDS:   With a 401-K I would stay fully invested in mutual funds.  With an IRA I would also stay fully invested in an exchange traded fund like the SPY or call options on the SPY.  The ONLY caution I would have is that after such a large move up in such a short period of time, it is normal to expect a pause or correction in the market.  As always, I'll be watching for signs of a correction and if it does occur, whether or not it's normal or a potential flip in the intermediate term trend.  Have a great weekend!

FINALLY

THE TRENDS:  As you can see from the weekly SPY chart below, this week closed very strongly above last week.  Not only that, but the market finally had a weekly close above the high of 142.21 made in April.  So both the long term and intermediate term trends remain up.

WHAT I WOULD DO WITH LONG TERM FUNDS:  If I still had a 401-K and was limited to mutual funds I would stay in.  But as bullish as this week's breakout was, it is important that there is "follow through" in the weeks to come.  Occasionally these breakouts can fail.  So I'm watching the 10 week moving average as a "line in the sand" that could potentially flip the intermediate term trend down.  This level is currently at 139.58.  Have a great weekend!