Financial Hurricane, Stock Markets Being Hit by a Storm?
Stock-Markets / Stock Index Trading Aug 23, 2009 - 12:31 AM GMTBy: Lynn_T
The beginning of the week certainly looked like the rally was over and it was time to abandon ship. Two of my indicators were in the life rafts and starting to lower their way down to the water. Then the end of the week came and the storm seemed to dissipate. The waves have lessened and all seems back to normal as we continue the sideways action/rally.
In my article last week, I stated that I thought the rally was over and that we would see sideways to down movement. I still stand by that notion. The rally, in my opinion, is over and we will see sideways to slightly down action in the next few weeks before the bulls get the stamina again to take us higher - possibly to the $135 level.
As I stated in the first paragraph, two of my indicators moved out of their bullish positions. With the week ending on an up note (relative to the start of the week), one of them has shifted back into bullish mode. The way my indicators have been moving, it feels like we're riding a merry-go-round. Up and down. Just make sure your saddle is fastened correctly, hang on and enjoy the ride.
Add 1/3 bullish position (see new weighting below).
Current Weighting Suggestion:
2/3 in Bullish Leverage
1/3 Cash
Long Term Investor Buy Signal Alert
Over the past several years, this indicator has predicted several 100-point or more moves in the S&P. There are only 2 to 3 of these signals every year, so they're worth paying attention to. This is an ideal signal for investors to put cash to work following a down move in the market.
There is no long term investor buy signal at present.
Past Long Term Investor Buy Signals
March 18,2009 - resulted in an advance of around 235 over 4 months
October 29, 2008 - resulted in an advance of 76 points over 4 days.
July 23, 2008 - resulted in an advance of 34 points over 3 weeks.
Long Term Investor Crash Warning Indicator
This indicator is a variation of the widely published Hindenburg Omen. We'll let you know when we're seeing indications of a potential crash to come. This would be a good time for long term investors to take some money off the table.
This indicator is not coming into play at this point in time.
You can email me with any questions at plus@stockbarometer.com.
Have a great week!
Lynn
To learn more about my Partial Leverage Utilization System, click here. This service is available for $21.95/month or $209/year. To try my service, click here.
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