Category Archives: Member Only

Technical Rotation or Breakout?

In the last few weeks, value stocks have out performed the momentum growth stocks.  The rallies in value stocks made an appearance of a healthier looking market.  With a broader participation, is the market ready for a breakout? Or is this a purely technical rotation?

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Follow the Price Action

Since August, we have been bearish expecting the market correction to run its course until sometime in October.  But the market had shown abnormal strength in the first nine trading days in September.  Because of the abnormal price action, we sent out private email notes on September 11th, which outlined the possibility that the correction bottom (early August low) might be in already.

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S&P 500 Cash Index Cycle Location 09062019

All three indices jumped over 50-day moving average last Thursday.  The 50-day moving average has been resistance since the selloff began in late July.  Does this break out of the 50-day moving average mean that the market is out of woods?

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What to Expect from the Second Half 0f 2019?

The last trading week of August was equally painful for the bears and bulls.  The market closed the volatile month of August in a neutral position, which means the immediate trend in motion may see follow-through into September.  The pivot range (2985-3004) of the S&P 500 cash index  for the second half of 2019 is calculated from the high, low and close of the first ten trading days of July.  S&P 500 index 2985-3004 price level will serve as the resistance for the second half of 2019. 

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S&P 500 Cash Index Cycle Location 08232019

In the last two weeks we have warned that the market has topped in late July.  We didn’t know what would be the exact fundamental reasons to cause the market move lower, but the price actions have shown plenty warnings in advance.  The market has shown amazing cyclical behaviors in the face of uncertainty, which allows us to forecast the market with reasonable confidence.

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