<o> </o>
If I’m consistent at anything, it would probably be my horrible IFT timing. Regardless, I’ve decided to protect myself by scaling out of stocks. In the short-term I could be selling at the bottom, but in the bigger picture I think there are better prices to be had.
<o></o>
I was disappointed by today’s action, in particular my 75% entry into the F-fund. The last two candlesticks could be a reversal pattern, so I won’t be surprised to see a pullback. Now how deep the pull back will be I don’t know, but at a maximum I’d expect a 38.2% Fibonacci retracement. This area just happens to coincide with the key area of 101.60 I’ve been watching.
<o></o>
I’ve already posted this weekly AGG chart before but in case you haven’t seen it I wanted to show why I believe 101.60 is a critical area and why I hope it becomes solid support.
<o></o>
Moving Average Cross<s>overs</s>unders
<o></o>
I’m a big believer in using moving average crossovers to identify a change in trend direction. There are a plethora of methods out there, but I like to keep it simple and stick with the 20, 50, & 200 Simple Moving Averages. The two biggest reasons I have for using these numbers is simple. For one thing I believe these numbers are the most commonly used numbers by the majority of investors. Therefore I’m watching for the same averages as everyone else. The second reason is because I follow the 15 minute, 60 minute and daily charts the most and believe these numbers work best with those time frames.
<o></o>
Moving on, we are at the cusp of the 20 MA crossing under the 50 MA on both the S&P 500 and $EMW. Here is a 2 year chart of $SPX showing what happens when the 20 crosses under the 50. Sufficed to say, it’s not pretty…
<link rel="File-List" href="file:///C:%5CDOCUME%7E1%5CAdmun%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml"><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w
unctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w
ontGrowAutofit/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> </w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" LatentStyleCount="156"> </w:LatentStyles> </xml><![endif]--><style> <!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> </style><!--[if gte mso 10]> <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} </style> <![endif]--> I also like to put a 20 & 30 day moving average on top of the number of S&P 500 stocks above their 50, 150, and 200 day moving average. $SPX50 gave a sell signal a while back, $SPXA150 gave one recently and it looks as if $SPXA200 is fixing to cross under as well.
<o></o>
Finally, I’d like to point out the obvious because some of us spend too much time focusing on the daily action. Simply put, this weekly chart shows us that we are in our fourth week of decline.
<o></o>
Whatever this market does, good luck to you…
<o></o>
If I’m consistent at anything, it would probably be my horrible IFT timing. Regardless, I’ve decided to protect myself by scaling out of stocks. In the short-term I could be selling at the bottom, but in the bigger picture I think there are better prices to be had.
<o></o>
I was disappointed by today’s action, in particular my 75% entry into the F-fund. The last two candlesticks could be a reversal pattern, so I won’t be surprised to see a pullback. Now how deep the pull back will be I don’t know, but at a maximum I’d expect a 38.2% Fibonacci retracement. This area just happens to coincide with the key area of 101.60 I’ve been watching.
<o></o>
I’ve already posted this weekly AGG chart before but in case you haven’t seen it I wanted to show why I believe 101.60 is a critical area and why I hope it becomes solid support.
<o></o>
Moving Average Cross<s>overs</s>unders
<o></o>
I’m a big believer in using moving average crossovers to identify a change in trend direction. There are a plethora of methods out there, but I like to keep it simple and stick with the 20, 50, & 200 Simple Moving Averages. The two biggest reasons I have for using these numbers is simple. For one thing I believe these numbers are the most commonly used numbers by the majority of investors. Therefore I’m watching for the same averages as everyone else. The second reason is because I follow the 15 minute, 60 minute and daily charts the most and believe these numbers work best with those time frames.
<o></o>
Moving on, we are at the cusp of the 20 MA crossing under the 50 MA on both the S&P 500 and $EMW. Here is a 2 year chart of $SPX showing what happens when the 20 crosses under the 50. Sufficed to say, it’s not pretty…
<link rel="File-List" href="file:///C:%5CDOCUME%7E1%5CAdmun%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml"><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w
unctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <wontGrowAutofit/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> </w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" LatentStyleCount="156"> </w:LatentStyles> </xml><![endif]--><style> <!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> </style><!--[if gte mso 10]> <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} </style> <![endif]--> I also like to put a 20 & 30 day moving average on top of the number of S&P 500 stocks above their 50, 150, and 200 day moving average. $SPX50 gave a sell signal a while back, $SPXA150 gave one recently and it looks as if $SPXA200 is fixing to cross under as well.<o></o>
Finally, I’d like to point out the obvious because some of us spend too much time focusing on the daily action. Simply put, this weekly chart shows us that we are in our fourth week of decline.
<o></o>
Whatever this market does, good luck to you…
<o></o>
