Tuesday, November 27, 2012

Markets Are Waiting For Good or Bad News

I first want to apologize for not updating this blog since September 17th.  I have been very busy trying to repair one of our rental properties so that we can place it back on the market, and I have also suffered through two medical emergencies since the last post.  Despite FED manipulation the week prior to September 17th the markets finally signaled a close to the sell period at the beginning of October (Chart 1 below). Right now the market remains in a holding pattern waiting for a sign (good or bad). Lately we have seen some very low volume market swings over the last two weeks, but participation seems limited and the general consensus appears to be caution.  A movement of the intermediate sentiment signal (blue signal line in Chart 1) above the pink line will indicate a tentative buy signal, but for now the best thing to do is wait on the side lines for an opportunity. 

For now the "Super Signal" (Chart 2 below) is indicating that there is no immediate risk of market collapse.  Although it is currently trending lower and approaching the same level indicated as the 2008 signal formation as indicated by the pink dashed line.  For more information on the "Super Signal" visit my Super Signal Charts page.

The expected trading range for the week of November 26th, 2012 is +/- 2.04% or a low of 1,380 and a high of 1,438 for the S&P 500.  Also based on recent historical performance the expected trading range chart is indicating that we may be approaching a good buying opportunity as the weekly expected volatility increases and moves back above the average trading range (see Chart 3 below). 

Chart 1: 11/27/2012 S&P 500 Sentiment Signals

Chart 2: 11/27/2012 S&P 500 Super Signal

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