BOUNCE BACK

THE TRENDS:  Both the long term and intermediate term trends remain up.  This week closed higher than last week but prices remain stuck right around the major highs made in 2000 and 2007.

WHAT I WOULD DO WITH LONG TERM FUNDS:  Basically my comments have not changed since last week.  If the market makes a weak daily close below the levels I indicated (see weekly SPY chart), then if the market were to close next Friday below those levels, an intermediate term sell signal would be given.  If this happens, I will update the blog at that time.  Otherwise, look for the next update to be next Saturday.  Enjoy the beautiful spring days ahead!

CAUTION

THE TRENDS:  Both the long term and intermediate term trends remain up BUT...after closing above the 2000 and 2007 market highs last week (see two green lines on weekly SPY chart), the market closed lower this week.  This is cause for concern because MANY other factors are now in place to indicate a high probability shift in the intermediate term trend to down.  The ONLY trigger left is if next week there is a close below the 10 week moving average (blue line).

WHAT I WOULD DO:  Normally I would follow the system and stay in the market, only exiting IF there was a weekly close below the 10 week MA.  But the market is very overbought on every time frame, is right at levels previously associated with large corrections and ALL of the other indicators are pointing down.  My strategy would be to exit 100% if we have a daily close below the 153.50 level.  This level represents the lowest level price traded this past week and is also below the 10 week MA.  IF this happens, an intermediate term short signal would likely follow and prices could drop to the next levels of support, which is the 146 - 149 level.  IF this happens, I will update the blog that day.  If not, I'll update again next Saturday.  Have a great weekend!

MOVING HIGHER

THE TRENDS:  Both the long term and intermediate term trends remain up.  As you can see on the weekly SPY chart, the market not only closed up again, but it made an all time high, rising above the previous high made in 2007.

WHAT I WOULD DO WITH LONG TERM FUNDS:  The last several weeks I've pointed out that I would only have 50% of my funds in the market due to the fact that we're at levels where historically very large declines have taken place.  Well, now that we've closed at long term highs I would take that as a sign of strength.  I would slowly commit more to the market, maybe 10 - 15% or so, and gradually get 100% committed as the market moves higher.  The reason I would not go all in just based on this new high is that there is still a decent probability that this move may just be temporary before the market turns back down.  Have a great weekend!

SIT AND WAIT

THE TRENDS:  Both the long term and intermediate term trends remain up.  However, this week closed lower than the previous week and lower than where the market opened on Monday.  On a short term basis, this is bearish.  However, there has not yet been a weekly close below the 10 period moving average (blue line).  Until this happens (along with some other factors) the intermediate term trend remains up.

WHAT I WOULD DO WITH LONG TERM FUNDS:  Nothing has changed since last week.  Half of my account would be on the sidelines and the other 50% remains in.  I would exit 100% into cash when the intermediate term trend flips down.  Have a great weekend!