WELL WELL

THE TRENDS:  The long term trend remains up and so does the intermediate term trend as you can see from the weekly SPY chart.  For the fourth straight week, the market closed higher.

WHAT I WOULD DO LONG TERM:  I learned a very important lesson.  After such a huge weekly move up, I expected sometime during the next  1 - 3 weeks the market would make a daily retracement to allow a lower risk entry into the anticipated move up.  But it didn't.  The danger of simply entering the market after such a large move up, is that the market more often than not will retrace, and sometimes severely.  The flip side is that sometimes, the market will simply skyrocket higher and leave me on the sidelines.  From this point forward, if there is a large single day up move that signals an intermediate up trend, I will throw 30-50% of my available funds into the market.  Then, as the market moves higher, commit more and more.  That is what I'm doing next week. Having said that, I'm keeping a VERY close eye on the charts now.  We are getting very close to the price levels where the last two prolonged bear markets occurred.  The 2000-2002 and 2008 bear markets where the markets declined 50% or more.  Have a great weekend.

KEEP YOUR POWDER DRY

THE TRENDS:  Both the long term and intermediate term trends remain up.  This week closed higher than last week and slightly higher than the high of 148.11 made in September.












WHAT I WOULD DO IN 401-K:  Unfortunately for the past two weeks the market has grinded slightly higher and has not retraced enough to allow for a low risk re-entry in the direction of the long term trend.  As enticing as it looks to get back in, right now is a particularly risky time to get in.  The probabilities STILL highly favor some type of correction.  I would remain out of the market 100%.  Have a great weekend.

UNCERTAINTY

THE TRENDS:  The long term trend remains up as does the intermediate term trend.  I mentioned last week that my expectation was that over the next few weeks I expected the market to congest or retrace a bit.  That is exactly what happened this past week.  While the market closed higher than the week before, it only closed marginally higher.  More importantly, it did not retrace enough to give an opportunity to re-enter the market.

WHAT I WOULD DO:  I would still stay on the sidelines until there is more of a retracement that would allow me to get in at lower price levels.  Right now price is too close to the 148 level, which represents the high made in September.  To get in now is NOT a high probability scenario as the prices declined quite precipitously from this level just 4 months ago.  Have a great weekend everyone.

YIKES WHAT HAPPENED?

THE TRENDS:  The long term trend remains up and as you can see in the weekly SPY chart the intermediate term trend flipped up in a very decisive manner.  Last week I mentioned that there was a possibility that we could see a rally off the 40 week moving average (white line).  However, I was not expecting such a violent reaction to the up side after touching it.  While on the face of it last week's price action was very bullish, most of the upward movement took place on Monday and the day after New Years day.  Thursday and Friday's movement were not very strong at all.

WHAT I WOULD DO:  White it may be tempting to go all in (100%), I would not do so at this point for two reasons:  1)  The market moved too far too fast.  2)  The market is too close to strong resistance around the 148 level, which is the September, 2012 high.  My expectation is that the market will retrace or congest a bit early next week.  If this happens and we get a bullish day later in the week I would start "dipping my toes" in the water by committing perhaps 50% of my account.  Then watch the 148 level for signs to see what the market does next.  Have a great weekend!