S&P 500 Market Timing Signal Still in Play: The Bearish Wedge

So where is the S&P 500 today?

The rising Bearish wedge is still in play. The SPY crossed BELOW the lower YELLOW LINE briefly and then recovered, which is positive. But this may be the start of a longer term (days to weeks) correction. Due to the mixed sentiment, it may not be the 20% plus rout some Bears are salivating for. Instead, it may just bring us back a few percentage points to retest breakout points.

Look at the key SUPPORT (BLUE LINES) levels below:

MARKET TIMING the SP500 (SPY ETF) Could Break Down Through the RISING BEARISH WEDGE

That said, as my blog posts indicate (see link below), the US dollar trade is going to be bringing down EVERYTHING except the US dollar. Even Treasuries seem to be selling off for now. If the sell-off intensifies, Treasuries may then rally along with the dollar, so the Treasury trade may be a tricky one.

CONCLUSION: The US dollar trade is ON as of today. (UUP; read prior posts above concerning the tax issues of trading the UUP).

WHAT ACTIONS CAN YOU TAKE?

1. You may choose to lighten up on stocks and commodities a bit here and prepare to rebuy lower. That is Passive Shorting™. Read my webpage on Passive Shorting™ to understand how to sell. You MUST be willing to rebuy if you sell. If not, you will be left waiting for the next 10% down when the next 10% is in fact UP.

I would not recommend selling everything at once, because in general that is a lousy strategy. Of course, you must do what you feel is best if you must protect your profits. Scaling out is generally better than one huge trade out of a market. You can get that report for free by becoming a FREE “Tips” subscriber (just ask me for it via contact page!).

2. OR set a stop below the highs at a point you are comfortable with. (see “Buying Checklist” page on how to use trailing stops)

Make sure you gain FREE access to my all my reports, especially the one on the dollar trade by subscribing to my FREE “Tips” reports here:

Click here to get my “Tips” for FREE

  • NOTE: I give REAL TIME TARGETS during the day many times, and if you subscribe to this BLOG, you will get Email announcements of each post. That way YOU will miss nothing.

    You can review the downside targets for various indices here:Market Timing Blog at SunAndStormInvesting.com

     

    Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

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