Quick n’ dirty market update

Today I do a review of the technical profiles of the S&P 500 (SPX), the NASDAQ, and  S&P TSX 300 (TSX) to determine if they look bullish or bearish. Purely trend and momentum studies today, folks. No waxing eloquently or economic / fundamental musings today.  Its all black & white, yes or no, good or bad, to the point analytics. Weekly charts only (mid-termed view). Lets get at it!

SPX

  • Downtrend broken, higher low, higher high for more than 3 days. Bullish.
  • Moneyflow (A/D line, bottom pane) still flat. Neutral.
  • Moneyflow momentum (top pane) rising yet not overbought. Bullish.
  • Stochastics rising but not overbought or hooking down. Bullish.
  • RSI rising not overbought. Bullish.
  • MACD rising, not overbought. Bullish.

 

 

TSX

  • Breakout of neckline consolidation – higher low, higher high for > 3 days. Bullish.
  • Moneyflow breaking out (bottom pane). Bullish.
  • Moneyflow momentum trending up. Early stage overbought, but not rounding over. Bullish.
  • Stochastics trending up. Early stage overbought, possible rounding over. Neutral
  • RSI trending up, not overbought. Bullish.
  • MACD trending up, not overbought. Bullish.

NASDAQ Composite

  • Downtrend broken, higher high for > 3 days, no higher low (last 2 lows same, consolidation breakout). Bullish.
  • Moneyflow downtrend broken. Bullish.
  • Moneyflow momentum trending up, not overbought. Bullish.
  • Stochastics trending up, overbought, not hooking down. Neutral
  • RSI trending up, not overbought. Bullish.
  • MACD trending up, not overbought. Bullish.

Conclusion

Bullish mid-termed technicals all around. Some neartermed signs of overbought conditions but not showing any immediate pressure to sell off.

We invested 1/4 of our cash holdings yesterday, bringing us down below 30% in cash. We will leg in again next week assuming no breakdown. Rules are rules.

10 Comments

  • Good Morning,
    Thank you for the update Keith. Rules are rules and the indicators are bullish. 👍

    What does the Smart/Dumb money indicator suggest? With all of those technical indicators presenting as Bullish, is the “Smart”money now investing or are they still selling into this rally?
    Just curious.
    Wendy

    Reply
    • Smart/dumb is a leading indicator so keep this in mind. It is NOT a coincident indicator, meaning it doesn’t signal immediate moves
      The spread is bearish–meaning that we should enjoy the part while it lasts, but it the smarties keep selling, its going to result in downside eventually.

      Reply
      • Yes, it sounds like there is near termed money to be had with these bullish indicators. I will keep in mind that the Smart/Dumb money is a leading indicator👍
        Thank you.

        Reply
      • I think FOMO is starting to settle in… Even though pundits are mostly saying bear is not over… And it can last for many weeks (and months) until we get a really bad news to crash the Market. And then the pundits will say: I told you!
        we’ve seen this type of confusing environment before. And everytime I waited too long, out of fear or waiting for clarity, and I put money back in the Market right before the crash 😉
        As you said “A system will save you from yourself”. And it goes both ways: north and south… 🙂 Time to put some cash at work… Thanks for your teaching.

        Reply
  • Thanks for the update Keith. I was wondering what your conviction is on funds deployed yesterday. If the SPX pulls back below 4100 as it looks like it might, would you consider reversing it, or possibly more, if it stayed below 4100 for 3+ days?

    Reply
    • Yes George, we bought one index play in each of our models -and two commodity plays. The commodities are longer view – but we will back off the index play(s) again next week if we see continued weakness. We do forgive “tails and spikes”- so we are keeping a close eye on things.

      Reply
  • The S&P failed to hold 4,100 as you indicated…it dropped to 4,080….looks like smart money is shorting the market. Tons of red today…Fangle etc.

    The tape turned to the downside..what changed? State of the Nation address? Better keep toe out the water.

    Reply
    • Yes, we are seeing some selling. This may or may not carry on – so I will give it a week. But it further illustrates my principle of legging in, rather than just making a one-time move back into (or out of) a market!

      Reply

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