Stock Market Bottoming Process
Stock-Markets / Stock Markets 2010 Feb 17, 2010 - 06:05 AM GMTBy: Lynn_T
Bottoming Process
Has the line been set?
My thought is that the line has been set for the bears to try and test or even break. Last week we saw a bounce in the action, causing my indicators to shift back into cash mode as they awaits direction from this holiday shortened week. For now, we will move back into cash for a tad to see how the rest of this holiday week plays out.
The bulls have had an incredible run over the last year (or at least from March 2009 thru January 2010). You could argue that the bears had a great run before then, which gave way to the running of the bulls. The market is a funny cyclical animal, always going up and down - like a sine wave.
The one thing you have to be aware of is consolidating periods. Not that you have to be afraid of them, just realize that they exist and can fake you out into being complacent. My indicators make sure we stay on the active side of things when things even out.
Remove 2/3 Bearish position (see new weighting below).
Current Weighting Suggestion:
3/3 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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