The Short-term-composite indicator has recovered from its oversold December condition and is now nearing 60%. Overlaid onto the indicator is the S&P 500 ETF (SPY) in green. The SPY has corrected from oversold but remains in its corrective trend. That market trend is vulnerable to a downside reassertion now that the market is no longer oversold.
Portfolio remains net short equity funds.
This Week's Trades
Note - Trades will be executed on today's close.
US Equity Indices
The NASDAQ 100 rallied from oversold. The counter-trend move is now nearing the 50-day exponential moving average and may well turn down again as it did in November, on two occasions. Should that repeat, fresh shorts could be considered.
The Russell 2000 Index fund is another example of the present market rally running into moving average resistance. Note the 14-day RSI back to just above neutral, prepped for a potential resumption lower.
US Sector Indices
The Global Energy Index fund rallied off an oversold condition in December. The price is now nearing resistance from the falling 50-day exponential moving average and momentum is no longer oversold. Potential for the short-term rally to soon tire.
The Semiconductor Index encounters potential resistance from its falling 50-day exponential moving average. The 14-day RSI is back to neutral. If the correction remains underway, it would reassert from here.
Other Developed Indices
International index funds have also bounced as far as falling moving average resistance. The Japan Index fund is testing its 50-day exponential moving average. Momentum, the 14-day RSI, has returned to the neutral sweet-spot.
The P&F relative chart reflects the long-term underperformance by the EWJ against the U.S. market.
The United States Oil Fund has reversed up this month on its P&F chart but that alone is not a buy signal. The long-term trend remains to the downside. To end that downtrend the price would need to clear the October 2018 high and that is some way off.
The 1-3year T-Bond fund holds its uptrend off the early November low. The pull-back over the past week is healthy, enabling momentum to cool off. The price and relative uptrends expected to soon resume.
Model Portfolio Notes
Opening of positions – Positions are opened on the immediate closing price following the report.
Stops - Two flash crashes (2010, 2015) and occasional bad prices have forced us to drop strict stops. Positons will no longer be stopped out but we shall suggest a region as to where we MAY exit.
Closures - With positions not being stopped out, we shall only exit positions via advice in the report. When we exit a trade, the next closing price is used.
Allocation – Each trade is allocated 5% of the portfolio.
Recommend a friend! Tell your friends to mention your name when subscribing to Investors Intelligence, and get a months free access to a service of your choice! For more information, email email@example.com
This report has been produced and compiled by Investors Intelligence, a division of Stockcube Research Limited which is authorised and regulated by the Financial Conduct Authority. It is distributed by Stockcube and is provided for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time Stockcube and any of its officers or employees may, to the extent permitted by law, have a position or otherwise be interested in any transactions, in any investments (including derivatives) directly or indirectly the subject of this report. Also Stockcube may from time to time perform other services (including acting as adviser or manager) for any company mentioned in this report. The value of securities can go down as well as up, and you may not get back the full amount you originally invested. Derivatives in particular are high risk, high reward investment instruments and an investor may lose some or all of his/her original investment. If you make an investment in securities that are denominated in a currency other than that of GB Pounds you are warned that changes in rates of foreign exchange may have an adverse effect on the value, price or income of the investment. The investments referred to herein may not be suitable investments for all persons accessing these pages. You should carefully consider whether all or any of these are suitable investments for you and if in any doubt consult an independent adviser. This report is prepared solely for the information of clients of Stockcube who are expected to make their own investment decisions without reliance on this report. Neither Stockcube nor any officer of Stockcube accepts any liability whatsoever for any direct and consequential loss arising from use of this report or its contents. This report may not be reproduced, distributed or published by any recipient for any purpose without the prior express consent of Stockcube.
Copyright 2019 by Stockcube Research Ltd.