12/25/2016: Markets were mixed again for the week, as the weaker Indices are slipping below the Pink Lines (10-day averages)… The Trump Rally is losing momentum, but the S&P & DOW could re-test the Highs again next week, on low “Pajama Boy” Buying. Eventually the S&P 500 should correct back down to the Red Line soon (50-day Avg.), which should create a nice Buying Trade back up.
The US Dollar and Stock Markets are Way Above the Green Line. Bonds and Gold are Way Below the Green Line. Since all Investments RETURN to the Green Line, expect some weaker or negative news about Politics or the strength of the Economy early next year. We don’t use fundamental news for analysis, but many do… and are mystified by our forecasts. But we don’t predict. We let the Green Line “Tell Us”.
Please view the Leader Chart List for pending Money Wave Buys & Open Positions.
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Alert! Market Risk HIGH (Red Zone). The probability of successful Short Term Trades is lower, when the S&P 500 is Way Above the Green Line. Even the Strongest Funds can get chopped up. Either take quick gains from Money Wave Pops, or STAY IN CASH & WAIT for a larger correction.
Tell your Friend about us, and HELP ANIMALS.
QUESTION: Daniel writes “I just came across your Homepage and was fascinated by the Quality of your work. I couldn’t however not find how you calculate your relative strength factor. Obviously you Point towards SCTR. But this SCTR line gives a different figure than your RS. For instance AMZN has an SCTR of 39.9 as of 12-23, but you indicate that the stock has an RS of 75. Can you please explain?
I wish you Merry Christmas from Switzerland”.
ANSWER: Thank you Daniel! We prefer to use Relative Strength from IBD (Investor’s Business Daily) or www.etfscreen.com, as they use more of a weighted 1 year RS. SCTR is convenient, but is weighted too much to the last 90 days of trading… Our Rules explain more.
Good trading, and tell your friends!