IT'S OFFICIAL

THE TRENDS:  While the long term trend remains up the intermediate term trend has turned down.  As you can see on the weekly SPY chart, the week closed below last week but more importantly also closed once again below the 10 week moving average and the high made in April of this year.  The probabilities highly favor a further down move to at least the 138 - 140 level. 

WHAT I WOULD DO LONG TERM:  Nothing has changed since last week.  I would remain 100% out of the stock market until the intermediate term trend flips back up in the direction of the long term trend.  Have a great weekend!

STILL DANGEROUS

THE TRENDS:  The long term trend remains up but the intermediate term outlook is a bit cloudy.  As you can see on the weekly SPY chart this week again closed below the 10 week moving average but not quite below the 142 high made last April.  This price action is VERY bearish.  For most of the week the market rallied only to get slammed on Friday.  The ONLY reason I don't feel 100% confident in declaring the intermediate term trend down is that there is one other important factor that I look at that is still pointing up instead of down.

WHAT I WOULD DO WITH LONG TERM FUNDS:  My stance has not changed since last week.  I would keep all of my money on the sidelines.  There is plenty of time to initiate a new position when the intermediate term trend is firmly pointing up again.  Have a great weekend!

NEGATIVE EXPECTANCY

Sorry about the late update.  Typically I do this in Saturday morning but my wife and I decided to take a day trip to see the fall colors and do some wine tasting. 

THE TRENDS:  While the long term trend remains up a majority of the factors I look at point to a flip down in the intermediate term trend.  On Friday the market closed below the 10 week moving average of 143.61.  It still has not closed below 142.21, which is the only positive sign at this time.  If you look closely at the chart you'll see the April - May 2012 time frame circled.  By the time this pattern completed, the market had already dropped 3% from the April high.  The market then proceeded to drop another 7%.  The pattern we just completed on Friday looks eerily similar.  While all of the factors are not in place to indicate an intermediate term down trend, the probabilities favor a similar drop this time.

WHAT I WOULD DO WITH LONG TERM FUNDS:  With a 401-K I would move a large percentage, if not all of my money into cash.  There's always time to get back in if the intermediate term trend reasserts itself.  The same is true for IRA's.  Enjoy the rest of your weekend!

A BOUNCE

THE TRENDS:  As you can see on the weekly SPY chart the market closed higher than the previous week.  As I mentioned two weeks ago a "normal" correction would end in the 142 - 144 area.  The low was actually made at 142.95 before the rally last week.  Both the intermediate and long term trends remain up.

WHAT I WOULD DO WITH LONG TERM FUNDS:  I see no reason to get out yet.  But I continue to watch the 142 - 143.26 area very closely.  If we get a weekly close in that zone, other factors point to a potential flip in intermediate trend.  Have a great fall weekend!