Sun and Storm Investing Market Timing Blog™

A Market Timing Report based on the 5-02-2014 Close, published Sunday May 4, 2014

The SP500 Index (SPX, SPY) continues to be an amusement ride and it’s in dire need of an orthopod for that shoulder problem. When the market trades around a key resistance level as it did Friday and closes below it, you have to pay attention.  One benefit of technical analysis is to get into a market at better times.  Now is clearly not the time to buy the SP500 Index as we just failed at a resistance level.  We can also escape the big downdrafts.  Several support levels are shown in the chart:

Here’s the SP500 Index Chart (click to enlarge):

Right Shoulder Issue

A close above the green line would obviously allow for a re-topping of the SP500 Index and even a rise to the upper yellow long term channel line (numbers given in this month’s free issue – see link below).

The sentiment spread between Bulls and Bears was again Bearish for the second week in a row, and you can catch up on current AAII investor sentiment in this month’s issue of WSSSR™ and what it means in terms of a potential pullback, after you subscribe:  Free Subscription to My Newsletter and access to my latest comments/strategy  I’ll send you back the password to the access page and the weekly newsletter in the same email.

The best sentiment analogy this week is with a very negative period in 2011.  You’ll want to read the text in this month’s issue (use the link above).

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

I also comment regularly on Twitter: Follow Me on Twitter

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Look for updates this week as needed via Twitter.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

A Market Timing Report based on the 4-25-2014 Close, published Sunday April 27, 2014

The SP500 Index (SPX, SPY) looks like an amusement ride lately, but the most recent market action did not amuse the Bulls.  We formed and tested the right shoulder in the SPX, which has been under-performing a number of other key markets as shown on my home page this week in the comparison chart (see SunAndStorm.com).

Here’s the SP500 Index Chart (click to enlarge):

SP500 Index forms a right shoulder.

We tested the rising aqua line in the above chart, which is the 50 day moving average.   Some like to make fun of commonly followed moving averages, but I don’t, because I realize that they are often the focus of market action.  Could the SPX simply keep bouncing from the 50 day moving average support?  Sure it could.  But we can just as easily test any of the levels of support beneath the Friday close (red lines) or we could test the yellow line just above the bottom red line, which represents the base of the multi-week up channel.

To keep it simple, the market is churning its gains even if it moves all the way down to the bottom red line in the chart above.  For a trader, that’s a long way down, but for an investor, it has less meaning.  So take your pick.

Below that bottom red line, traders and investors will be experiencing new weakness requiring action for all but long term buy and hold investors in my opinion.

The sentiment spread between Bulls and Bears was again Bearish this past week, and you can catch up on current AAII investor sentiment on the “WSSSR Access” page and what it means for this pullback, after you subscribe:  Free Subscription to My Newsletter and access to my latest comments/strategy  I’ll send you back the password to the access page and the weekly newsletter in the same email.

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

I also comment regularly on Twitter: Follow Me on Twitter

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Look for updates this week as needed via Twitter.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

A Market Timing Report based on the 4-17-2014 Close, published Sunday April 20, 2014

The SP500 Index (SPX, SPY) close last Friday marked the low.
The market has since bounced more than halfway back to the green line on the chart below, which represents the prior breakout point.  Earnings have been mixed and despite that, we have this strong bounce, which is a positive for the Bulls.

The market began bouncing even before Janet Yellen spoke and the Beige Book economic report came out on Wednesday.  On Thursday, the final market day of the week, the SPX even sloughed off mediocre results by Google (GOOGL).  This means there are still buyers waiting for these dips and containing their depth.

Clearly the market can re-top in a day or two.  Then the yellow channel line comes into play.  There is a good amount of resistance built up at that green line, so if we go over it, be sure to be impressed!  I sensed the risk of selling the low, so we rotated assets into other indices that should outperform the U.S. market this year, rather than selling partial positions at the low and holding cash.

Here’s the SP500 Index Chart (click to enlarge):

More than half way back in the current bounce.

Sentiment was fairly Bearish this past week, and you can catch up on current investor sentiment on the “WSSSR Access” page and what it means for this bounce, after you subscribe:  Free Subscription to My Newsletter and access to my latest comments/strategy  I’ll send you back the password to the access page and the weekly newsletter in the same email.

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

I also comment regularly on Twitter: Follow Me on Twitter

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Look for updates this week as needed via Twitter.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

A Market Timing Report based on the 4-11-2014 Close, published Sunday April 13, 2014

The SP500 Index (SPX, SPY) fell following a failed breakout to new 2014 highs.  Markets often test higher levels in that manner, though they don’t always fall of course!  When not enough buyers are there to take a stock or index to higher and higher highs, the market falls back through prior resistance and heads lower.

We are now at one of the support levels pointed out last Sunday with the major channel line (yellow) just below.  If that does not hold, it would suggest a worsening of the market’s character, and we may see a much more sizable correction.  Be prepared to protect your profits at some point.  For example, we’ve already sold 75% of our U.S. small cap exposure.   Of course, follow your own plan, but riding this market down 25-30%, if that happens, is something that you may not want to do.

Immediate support is at SPX 1813.55 (11-29 high), 1804 and 1768.  Since we are at support right here, selling right at the Friday close would not make much sense.

As mentioned in prior posts, I generally recommend selling in steps unless there is a major event to deal with such as the Japanese tsunami.  Then it’s advisable to get out immediately as the market often freezes up for a day or at least the following morning as if to pay its respects.

Do NOT sell if you are not willing to re-enter the market however.  That is how many lost huge amounts of money during the 2008-2009 decline.  They sold at the bottom and never changed their mind about stocks.  Not a good strategy.

Most of the data hinted that sentiment was setting us up for less of a pullback than we’ve seen, at least on an immediate basis, but there was one instance that showed a similar sentiment pattern where that was not the case.  You can read that and about what our allocation is to each major index that we follow here as well as where we’ll peel off some more exposure:  Free Subscription to My Newsletter and access to my latest comments/strategy  I’ll send you back the password to the access page and the weekly newsletter in the same email.

Here’s the SP500 Index Chart (click to enlarge):

SP500 Index is nearly at critical support.

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

I also comment regularly on Twitter: Follow Me on Twitter

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Look for updates this week as needed via Twitter.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.