The S&P 500 did not break the trigger level today, a new “UP” indicator was not triggered. The potential for an indicator change continues, with an updated S&P 500 trigger level. The Major Market Timing Indicator #2 will change to UP with an intraday break over S&P 500 1288 on Thursday 6/9/11. In other words, if the S&P 500 high for the day is over 1288.00, the indicator will change to “UP”. The publisher will re-allocate part of his holdings to aggressive funds just before the market close on Thursday if the indicator changes; the new publisher allocation will be 50% aggressive funds, 50% Bond fund (TIPs, or treasury inflation protected securities).
A new post will appear here Thursday night by 10:30PM Eastern time with an update – please check back.
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Market Timing Indicator Change Alert
The Major Market Timing Indicator #2 will change to UP with an intraday break over S&P 500 1297 on Wednesday 6/8/11. In other words, if the S&P 500 high for the day is over 1297.00, the indicator will change to “UP”. The publisher will re-allocate part of his holdings to aggressive funds just before the market close on Wednesday if the indicator changes; the new publisher allocation will be 50% aggressive funds, 50% Bond fund (TIPs, or treasury inflation protected securities).
A new post will appear here Wednesday night by 10:30PM Eastern time with an update – please check back.
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Both Major Market Timing indicator #1 and #2 remain on “DOWN”. The market has been nearly flat in the 3 months since the new “DOWN” indicator occurred in Market Timing Indicator #2 on 2/23/2011 at S&P 500 1310.
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A new “DOWN” trend was indicated by the Major Market Timing Indicator #2 on 2-22-2011, confirmed on Wednesday 2-23-2011.
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Market Timing Indicator Change Alert
Some of our subscribers asked that we inform them if a new “DOWN” indicator change occurred even though the Major Market indicators are already on “DOWN”.
On Tuesday 2/22/2011 a warning for a potential new “DOWN” indicator in Major Market Timing Indicator #2 occurred – the new indicator has not yet been confirmed. A confirmed “DOWN” in indicator #2 would occur with an S&P 500 close below 1309 on Wednesday or Thursday.
I will post an update immediately if the indicator change does occur. I will post an update by Thursday night even if the indicator change does not occur.
Given recent market behavior, we would expect a correction of 5-10% from the peak of S&P 1344 if the new “DOWN” does occur. However, deeper market drops have occurred in the past after new “DOWN” indicators. Given the growing problem with high oil prices and unrest in the Middle East, the risk of a larger drop is higher than normal.
I had a 25% position in higher risk stock funds that I moved in entirety to a more conservative (“Bear-resistant”) stock fund due to the growing risk. This stock fund is heavily weighted in energy, commodity, and health care holdings. New allocation: 25% conservative stock fund, 75% Bond and Cash funds.
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We saw the last day of the month/first day of the month stock market rally, so there was no confirmation for a new “DOWN” indicator. The risk of a “DOWN” move is greater than it has been recently, and we will continue to monitor the markets and our indicators daily. We will immediately send an e-mail to all subscribers if there is any indicator change.
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