SP500 Index Market Timing: This rally will be intact if…

Posted on February 7, 2011 by David Durand

The current rally in the SP500 index will be intact if these corroborating market timing signals hold into today’s close:

  • The banking index (BKX) can close at a new recent high above 54.87
  • The small and midcaps can also close at new highs today. That means the Russell 2000 closing over 807.89 and the S&P Midcap 400 index closing over 939.56.

At the moment, the BKX is a bit close to the breakout point, but the other two indices are well above the cited numbers. Tech has already broken out (NASDAQ and NDX) as has the SP500 index itself.

Please see yesterday’s issue of the SP500Tracker™ Newsletter to see exactly where we are:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

What to do?

The fact that the indices have broken out yet again in the face of very high sentiment readings simply tells you that we are entering the bubble phase of the market. As I’ve commented recently, you have the option of lightening up a bit as we move up or simply using a trailing stop and selling when the market pulls back and closes a certain percent below the high that was achieved. That is the definition of a trailing stop loss and is a great way to always be sure to preserve profits on profitable investments and trades. You can read more on the website about stop losses on the buying checklist page here:

Buying and Selling Checklist

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

Copyright © 2011 by Wall Street Sun and Storm Report, LLC All rights reserved.

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SP500 Market Timing: The Ice Has been Broken

Posted on February 3, 2011 by David Durand

Sometimes breaking the ice is a good thing. This is not one of those times! The SP500 has finally broken the ice located at the breakout point of 1302.67, but is only about 3 points below that at 10:48 am ET. So we have no idea of where the close is going to be and THE CLOSE is more important than where we are right now. But it does say that the breakout above the last Bearish wedge as seen in the chart I mentioned yesterday has now been challenged.

The prior breakout did not hold and now the second breakout is in jeopardy. We may only see a mild correction or something much more significant. According to sentiment data, things were stretched a couple of weeks ago at levels that were last seen at the April 2010 highs. That would indicate the possibility of a significant pullback here, but as we saw in 1999, crazy can get crazier.

Follow “my number” above and decide where you will scale out reducing your exposure to stocks and preserving your profits. Read how to go passively short on my website (see the blue Navigation Bar) and you’ll have the knowledge to get out AND get back in when the time is right. How much you scale out is obviously something you need to decide as an investor.

By the way, my SP500 tracking newsletter is out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

Copyright © 2011 by Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in investment, investor sentiment, Market timing, S&P 500 Index, trading | Tagged , , , , | Leave a comment

SP500 Index Market Timing: Will the Ice Hold?

Posted on February 2, 2011 by David Durand

The SP500 index is at 1303.51, just barely above the breakout number of (and write this one down) 1302.67. It needs to close above there and keep moving for this last breakout to hold. The question is whether the ice holds today.

Remember that the prior breakout before this one above the second wedge that is shown in the chart in my free SP500 tracking newsletter (see below) failed initially. So this breakout may fail as well. I’m not saying that it must. I am telling you what number I am watching. Since I started typing this the SP500 has moved up a bit to 1305.71, so the ice is a bit thicker than at the open! Oops! Just as I was about to publish this, the SP500 has dropped to 1303.21. Thin ice can hold of course as the market retests the breakout point. 1302.67 is the number I will follow today.

When I advised that you might lighten up on stocks over the past few days, I laid out the options. You can sell into strength or wait for a fall of a certain magnitude to move out of the way during a correction. Or you can even ride it out. Just don’t ride out the big ones! Set some sort of stop and scale out in stages if you prefer. Since we are still above the breakout point, using a trailing stop may work out better than deciding that the market will fail right here. If you don’t know what the “trailing stop” is, please see my webpage on the main SunAndStormInvesting.com site labeled “Buying Checklist.” You must know where you will sell when you buy!

By the way, my SP500 tracking newsletter is out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

Copyright © 2011 by Wall Street Sun and Storm Report, LLC All rights reserved.

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SP500 Index Market Timing: Another Place to Sell

Posted on February 1, 2011 by David Durand

You have another possible place to sell today. We are back up at the resistance of the last high on the daily chart. We are JUST below the prior daily high. Now, if you firmly believe it’s “full steam ahead,” by all means maintain your long positions and sell only after a pullback of whatever percentage you choose by using a mental “trailing stop.” But if you believe this could be a good place to average out, take at least some “off the table.” Read yesterday’s post for further thoughts on selling strategies.

Could the market simply blast through this last high and leave all Bearish thoughts behind? Of course it could. So decide what you believe and ACT on it. (Acting on it, may mean doing nothing of course, but do “nothing” consciously!) And take 100% responsibility for your decisions, so you improve with every decision you make. Also, please read or re-read my webpage on going “passively short” here:

Passive Shorting™ Secret

By the way, my SP500 tracking newsletter will be out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

Copyright © 2011 by Wall Street Sun and Storm Report, LLC All rights reserved.

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SP500 Index Market Timing: Rallying to Resistance

Posted on January 31, 2011 by David Durand

The SP500 index has bounced up to initial resistance on the 15 minute and 60 minute charts. If you were looking for a spot to sell, this would be it. Or you can wait for the next downswing in the market and use the stop loss of your choice. I would review my free SP500 tracking newsletter, before taking action (sign up below to have immediate access). It spells out various choices you could make. Selling some of your position at this resistance level would be one of those choices. Remember that scaling out is often the wiser choice. If you are overexposed to equities, you may want to sell more rapidly.

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

© 2010-2011 David B. Durand, M.D. All rights reserved.

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SP500 Index: Not enough! The Wedge is Back in Play

Posted on January 28, 2011 by David Durand

The SP500 has reaffirmed the prior wedge break market timing signal assuming that the failed breakout holds into the close today. Can the market just saunter back up in the face of retail disappointment (Ford and Amazon) and the Egypt situation? It seems unlikely.

The only way the wedge break was going to be reversed was to have a strong breakout above the high point of the wedge. We did not get it. Not enough strength to call a victory anyway.

I mentioned yesterday that 2 days above a breakout point, especially with such a weak breakout of just a few points, is not enough to declare a Bullish resolution of the upward Bearish wedge we saw in the chart. If the close is clearly below the top of the wedge, there will likely be more downside for days to weeks. The market has been reluctant to correct. This may be the time it finally gives back some gains whether it’s a 2-3 day rout, an intermediate term pullback or something more serious.

Regardless of the extent of the current pullbakc, the targets I presented on Monday in my FREE SP500Tracker™ newsletter are now in play. And you can read this past Monday’s issue now by subscribing using the link below.

My SP500 tracking newsletter is out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

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AAII Investor Sentiment is NOT in the Way – Not short term anyway

Posted on January 27, 2011 by David Durand

For the details please go to my AAII page here: AAII Investor Sentiment Review

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SP500 Market Timing: How much of a breakout is enough?

Posted on January 27, 2011 by David Durand

Well, the SP500 index DID break out above the wedge (bearish market timing signal) that I wrote about in last weekend’s SP500Tracker™. But not by much. We are at this moment (3:17 pm ET) just 3.22 points above the breakout point of 1296.06. This is not exactly a resounding blast through resistance, but it could survive as a breakout.

Most breakouts tend to be confirmed by the 3rd day after the breakout. It can take less or more time than that, but that is a rule of thumb. This would be the second day above the breakout point if the close stays above there. A close below that 1296.06 level could turn into a reversal leading to an intermediate term sell-off.

Thank you by the way for helping to make my website the number 1 ranked “market timing blog” on Google! Spread the word if you find what I share of value. I appreciate your support.

Don’t forget that my SP500 tracking newsletter is out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

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Gold Stocks (HUI index; GDX) Run Ahead of Gold (GLD,IAU)

Posted on January 26, 2011 by David Durand

The GLD ETF is only up 0.02% while the gold stock ETF (GDX) is up 2.00%. Quite a difference. A market timing perspective and a fundamental perspective would BOTH be suspicious of the gold stock move. You might want to be as well! The two need to be moving together. They do not always run in complete synchrony, but the correlation is high. Gold stocks tend to make you more in a Bull move and lose you more in a Bear move. Wait for the gold ETF / gold to bounce before you buy into the gold stock ETF bounces today!

By the way, my SP500 tracking newsletter is out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

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SP500 Index: Still not clear of the SELL signal

Posted on January 25, 2011 by David Durand

The SP500 index has still not voided the market timing signal given off when the last upward wedge was broken. (The chart is in the SP500Tracker™ newsletter that can be obtained free using the link below.) The only way the market can reverse the sell signal is to close above 1296.06. If it can, the Bulls will be back in the game. This seems unlikely with the recent highs in sentiment.

Click Here to Subscribe to my FREE SP500Tracker™ Market Timing Newsletter and free “Tips”

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

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