The market fell very far today, November 9, 2011. I have further reduced my holdings in stock funds, and am going to keep more holdings in cash now given the escalating situation in Europe (apparent risk of Italy default).
Indicator #2 remains in neutral territory, but is very close to a “DOWN” – with a market close below S&P 500 1216 we’ll likely move Indicator #2 to “DOWN”.
The market is again at a point where a short term bounce up is likely (as indicated by very short term indicators that I do not publish), but the news in Europe may be the dominant force in the market.
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We ended up getting the short-term move up that we indicated on Tuesday 11/1/2011 – see prior post. The market is in neutral territory as a result of the move up – not enough of a upward move to trigger an “UP” in Indicator #1, but at a point where Indicator #2 will stay on “UP”. I will send out an e-mail to registered users if an Indicator does change.
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The market has fallen substancially since our Sunday post, so a new “UP” in Indicator #1 was not triggered and the pending change is effectively cancelled for now.
Meanwhile, a “stop” sell was triggered in Indicator #2 with the S&P 500 close below 1255, and I have reduced my holdings in stock funds. The market is at a point where a short term bounce up is likely, so I will not trigger a new “DOWN” in indicator #2 for at least another day.
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The Major Market Timing Indicator #1 will change to UP with a confirming move above S&P 500 1300 sometime in the next few days. A confirming move typically requires 2 closes above 1300, but we’ll wait to publish the indicator change based on market action. End of year rallies have been strong in a majority of the last 15 years – there is a good chance of an upward move if Indicator #1 does change to “UP”. It’s also possible that the market will fall a bit from here, in which case the “pending” change would be cancelled.
A new post will appear here Monday or Tuesday by 10PM US Eastern time with an update – please check back.
Note we’ve also established a “stop loss” level for Major Market Indicator #2 at S&P 500 1255. A break below 1255 would likely cause the publisher to close existing positions.
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As we suggested yesterday, Indicator #2 has changed back to “UP” after a turnaround in the S&P 500. The publisher moved back into stock funds based on the indicator change.
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Both indicator 1 and 2 are now confirmed on “DOWN” due to breaking our stop loss level of 1248 and the subsequent close below 1195.
Very short term indicators and medium term indicators are indicating a rebound move up is coming in the next 1-4 days. The market may fall further first, but will then bounce (typically the market bounces up substantially after a large move down).
In fact, Major Market Indicator #2 will move to UP pending on Tuesday. While I have moved 90%+ of my holdings to cash after the S&P 500 dropped below our “stop loss” level of 1248, I am now keeping my remaining stock fund positions in anticipation of the rebound.
Please check back Tuesday and Wednesday for further alerts on Indicator #2.
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