Current SPX Position: Long at 1683.47
Next Action: Stop-n-go-short at 1678.11
System Score: 5.5=Neutral=Trend Score + Turn Score=10-4.5
Proposed New Score: 54%=Neutral=Trend Score + Turn Score=48+6
More whipsaw. Frustrating but reality. The Score is still neutral and approaching bullish. In June, I mentioned that my discretionary spending indicator had a near miss call for an SPX top in mid-to-late July exactly 2 months after the official call for an 8-10% 4-9 week SPX drop starting in mid-to-late May. I wondered whether that near miss projection (closest since I started using it in 2007) meant we'd get a failed/retested top or smaller drop in late July. Of course, we now officially have a new high but we don't know if we'll get a significant top or not imminently. It will be interesting to watch. Today was an SOS day, but SPX has just been consolidating for a couple days and then gapping higher after recent ones. The daily and weekly negative divergences have gotten worse. History suggests the recent sustained spike in interest rates will have an impact very soon and spending has been pretty anemic. Perhaps QE will balance it all out and keep SPX in its 8-10% range for a few more months, but any higher rates, any tapered QE and any faltering housing as a result could tip the scale negative. Good fortune.
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