05/06/2018: Markets were mixed for the week, but the Indices were able to bounce up from a larger drop earlier in the week. For the week, the Dow and the S&P 500 lost 0.2% each, but the Nasdaq notched a 1.5% win. The NASDAQ 100 and Small Cap Indices closed Above the Red Lines (50-day avgs.) but the S&P and DOW Indices have not.
Currently 45% of the S&P 500 Stocks are Below the 200-day average, so stay with the Strongest Investments. Otherwise you might get stuck and very frustrated. The Long Term Trend is UP.
The Inflation Index (CRB) is near the Highs this week at 203.25, and is now in a mild Up-Trend.
Bonds are bearish (Below the Green Line and Low Relative Strength) but bounced recently up to the Red Line (50-day avg.) Bonds are not convinced that the Economy is that strong, or they would be breaking Support.
The US DOLLAR has broken above a longer term Down Trend line, and was able to Close back Above the Green Line. This has put pressure on the Tech Stocks.
LONG TERM TRADES
The Funds below are correcting down to their Green Lines, but the Relative Strength is remaining high. These tend to Bounce nicely when the weekly Money Wave crosses up > 20.
ARRY ARRAY BIOPHARMA Wait for Weekly Money Wave Close > 20.
SMH SEMICONDUCTOR FUND Wait for SMH to Close Above the Red Line.
TCEHY TENCENT HOLDINGS Wait for Weekly Money Wave Close > 20.
REMX RARE EARTH FUND Buy Above Blue Down Trend Line on Weekly.
Alert! Market Risk is Medium (Yellow Zone). The probability of successful Short Term Trades is higher, when the S&P 500 is down near the Green Line.
Tell your Friends about the Green Line, and Help Animals.
QUESTION: Dennis writes “The caution “Way Above the Green Line” is frequently raised. My question is: In percentage terms, how far above the Green Line constitutes being “Way Above”? A percentage range is a reasonable response.”
ANSWER: If you Buy Way Above the Green Line, when the Investment RETURNS to the Green Line (Overly Optimistic Emotion Fades) you will normally have a “sick feeling”.