SPX Is Coming Up Against Stiff Resistance

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

The rally in the last three days has been impressive. We saw excellent breadth, decrease in number of new lows and small caps significantly outperforming.  SPX has now reached a stiff  resistance band (1620-1635) that is crowded by 20/50 D-SMA's and primary trend lines. Chances are good that after an initial rally tomorrow, SPX is pushed back down to retest support at 1600. 

My plan is to do my  fourth and last buy if we have  a successful back test at SPX 1600.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Earnings ... Earnings ... Earnings

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

Yesterday's rally was impressive.  Breadth was excellent, small caps slightly outperformed, DJT rose almost 2%, outperforming other indices, and number of new 52 week lows dropped significantly.  This morning futures are nicely higher and for now it looks like that SPX is going to take out resistance at 1600.

There are two very probable scenarios from here going forward:

• A - 70%: Indices rally, back test and take out all resistance along the way to challenge mid May all time highs.  That would require fantastic earnings reports and forecasts. 
  
  
• B - 30%: Indices rally to back test 50/20 D-SMA's and primary trend lines (brown circle, SPX 1620 - 1630) then sells off hard to test recent lows as earnings reports disappoint.

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Have We Seen The Bottom?

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

Have we seen the bottom in the US markets for the current sell off?  Very likely yes, but the down side risk is still pretty high.  Yesterday, the number of new lows, for both on NYSE and NAZ, substantially increased to their highest levels for 2013.  Also, as of close of yesterday, three (SPX, DJT and RUT) out of five major indices are still trading below their primary uptrend lines.

What bulls need this week is a massive rally to push those indices above their primary uptrend lines. That is a tall order, but Fed's jawboning (causing massive short covering) might get it done by Friday.  Today is critical. If we get a solid green day (1/2 percent or better) accompanied by collapse of numbers of new lows in both NYSE and NAZ, I think chances would be excellent that the correction, for the US markets, is done at least in terms of price, but not quite there in terms of time.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Primary Uptrend Lines

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

Primary uptrend lines for two (DJT and SPX) of five major indices were decisively broken last week, but primary uptrend lines for the remaining three (NAZ, DJI and RUT) are still intact.  For now that is bullish and indicates that the recent decline is a normal correction in a powerful bull market.  What's needed now is for indices to rally soon and by Friday at least one of the two indices that are trading below their primary uptrend lines starts trading above its primary uptrend line.

Per my plan I did my 3rd buy last week.  SPX very likely trades in 1600 to 1540 range this week, but DJT could rally and close above its primary uptrend line by Friday.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

SPX 1610-1620 Support Range

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

The sell off during Ben's press conference was all in futures.  SPX very likely tests its support range (1610-1620) and bounces quickly.  I did some buying as SPX sold off to its 20 D-SMA today.  My plan is to finish my 3rd buy tomorrow either as SPX tests its support or near close.

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20 and 50 Day Simple Moving Average Sandwich

RTS Long Term Current and Past Portfolio

Updated for CIEN / KBH trade and 2nd buy on 6/12

RTS Long Term Dividend Current and Past Portfolios

Updated for 2nd buy on 6/12

I follow 5 major indices (SPX, NAZ, RUT, DJT and DJI) closely.  Three of those indices (DJT, DJI and SPX) are now trading slightly above their primary downtrend lines.  That is bullish.  The remaining two (RUT ad NAZ) are still trading below theirs, not so good.  Also not so good is that all five major indices can't  get over the resistance at their 20 D-SMA's.  Breaking through that resistance soon  is critical if current bull run is to continue, otherwise 50 D-SMA's would fail and indices would head down to test their 100 and 200 D-SMA's.
 

Chances are good this coming week that more selling hits all markets.  A retest of of SPX 1600 Cash early in the week is likely, but by Thr or Fri we should see at least two or three major indices above their 20 D-SMA's.  Once that happens, remaining indices will follow suit and we would be on our way to challenge recent all time and multi-year highs.

My plan is exit all longs should we get a solid and heavy close below 50 D-SMA for SPX (not likely).  If SPX rallies and closes above 20 D-SMA, I would do my 3rd buy as it comes back down to back test 20 D-SMA.

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RTS Is Selling KBH and Buying CIEN

RTS Long Term Current and Past Portfolios

Tomorrow Wednesday June 12, RTS sells KBH and buys CIEN in its place at the open.

RTS Long Term Dividend Current and Past Portfolios

Today Big Money was not active at all. Cash indices were moved up and down via their futures. At this point, chances are good that SPX retests its 50 D-SMA which also coincides with the primary uptrend line at around 1611 sometime this week. I think if those supports hold up SPX would rally to 20 D-SMA, punch through and continue to 1700. My plan is to do my second buy at 1611 and my 3rd buy once we clear 20 D-SMA.

 

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Looking Good

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

SPX closed slightly above its Primary Downtrend Line (thick black). That's is very bullish, especially since the number new lows dramatically dropped.  I think we are on our way to take out recent highs in indices.

I didn't do my buying at 1600 as I had planned. I am going to wait for a back test of Downtrend Line and do my 2nd buy then, early this week hopefully.

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A Buying Opportunity Is Coming Up

RTS Long Term Current and Past Portfolio

RTS Long Term Dividend Current and Past Portfolios

Cash indices were push down hard Friday afternoon just before close causing SPX breaking out of its triangular formation (thick blue) to the down side.  I believe that's a false break out.  Big Money is trying to trap bears before pushing indices much higher late next week.

Chances are good that we see SPX testing the support range around 1620's early this week, possibly Monday AM.  That would be a good buying opportunity.  I started doing my 2nd buy minutes prior to close on Friday.  I am planning to finish my second buy sometime Monday as SPX tests 1620's support range.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.