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The S&P 500 had a chance to pull off a buy trigger at the bottom of the range this past week. But, within a hair, the trigger was not set and the S&P 500 slid further to the downside. The S&P 500 finished down for the week and we are still above support. If we break support, a measured move would be to about the 2460 level. That is just over 5.5% away from Friday’s closing price. Don’t know if it will break, but if it does, we will look for that area as support.
Bull / Bear Market
The S&P 500 and All World (ex-USA) Indexes are still in bull markets according to our 12-month momentum measurements. Both indices are pretty much neck and neck with each other with regards to performance. Until we see these indices fall below the 12-month performance of treasuries, we are in a longer-term risk on stance.
The swing indexes we like are the following: United Kingdom / Japan / Oil / Extended Treasury / Australia / Brazil / International Government Inflation-Protection Bonds / EAFE Value
Although the US equity markets were down, there was some upside in the international markets. The UK was the winner for the week as it had the largest of the advances. Most of the European Indexes fared better than the other international and US markets. Treasuries fell slightly, but are still a good 5% or so above support. We are still a pretty good distance away from a majority of our stops and second purchase ranges. No markets gave a buy signal this week that we are really excited about. Our two last week did not trigger, so we didn’t get involved with anything additional.
Well, last week the bulls had a great opportunity to shoot the equity indexes higher. Many buy signals were issued, but there was no follow through giving us the final go ahead trigger. Many of the equity markets are on the verge of breaking the longer-term bull channel and at least widening the trading range. The bulls still have the longer-term bias, but each week that goes by without an advance gives more weight to the bears. Producer Price Index, Consumer Price Index, and the FOMC meeting minutes are on the schedule for this week. Any of those could be considered a catalyst for a move in the markets this coming week. We will watch closely and take the appropriate actions.
The Education/Gratitude Book Club
This month’s book is “The War of Art: Break Through the Blocks and Win Your Inner Creative Battles” by Steven Pressfield. Just got the book in…looking forward to getting to it. Have a great week.
Adam Straseske, CMT