Last week the S&P 500 triggered a tentative sell signal (see Chart 1 below). This indicates that it is now time to begin looking for opportunity to reduce long positions in equity markets (always incrementally). I break down sell periods into two phases a "Tentative Sell" and "Sell" period. Historically there have been some reversals of a Tentative Sell signal, but sometimes the Tentative Sell period could be the best time for gains. Based on the current slope of the long term signal it appears that both phases of the sell period will last about 2 months. What I find interesting though, is that we are beginning to see the slope of the 200 Day SMA turn positive. This is usually a signal that we are at the beginning of long term market gains (look back at July 2010 as reference). Therefore, I will begin to re-balance my portfolio to be about 50/50 by mid August (50% equities, 50% bonds, secure assets, and cash).
Important Note: If invested in mutual funds make sure to not violate the funds rules when selling.
This weeks expected trading range is +/- 3.30% of between 1,299 and 1,387 as shown in Chart 2 below.
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Important Note: If invested in mutual funds make sure to not violate the funds rules when selling.
This weeks expected trading range is +/- 3.30% of between 1,299 and 1,387 as shown in Chart 2 below.
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| Chart 1: 06/15/2012 S&P 500 Sentiment Signals |
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| Chart 2: Week Of 6/18/2012 S&P500 Expected Trading Range |
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