I didn’t have time to include this chart in the video that shows a continued decline in he stocks above the 50 day moving average in the S&P since October of last year. You can see the chart of the S&P below and the rising trendline that provided support until March of this year is now acting as resistance.  I believe that distribution is going on behind the scenes at a slow but consistent rate and should sound some alarm bells.

Below I created a video that explains some changes in my market timing system and hopefully you’ll better understand my thinking about when to buy, when to sit on the sidelines and when to exit. If there’s anything you don’t understand or I didn’t make clear please ask in the comment section.  It’s very easy to leave something out or not cover everything I wanted to in 5 minutes.

My new filter gave a warning sign on Tuesday May 3rd, and at that time it would be prudent to stop buying on the long side and allow your stops to take you out of your current positions as the market is most likely entering a sideways or volatile market. As for my strategy going forward, I’m waiting for renewed, convincing strength to get back long or an overall sell signal on the markets.

Another strategy when my filter turns is for aggressive traders to short the indexes as a hedge against their longs. I’ll provide more specific instructions to those on my mailing list as these new signals trigger. You can sign up to my free newsletter on the right.

Stocks-above-SP.png

Related Posts:

Things I Didn’t Like About Today