SPX: In Like a Lion, Out Like a Lamb?
March is upon us, and all the major indexes have been down for the past few days. If this continues into tomorrow without a break by Monday, we're likely back into correction territory and I'm putting my cash investments into treasuries or bonds. VIX is beginning to rise and there are pockets in the various sectors that are showing profit if you know what to look for, but there's equally as making fakers and jokers out there giving the exact same buy signals. Now is the time to remain disciplined with your trading strategy and ensure that you're exercising appropriate risk management with sound buy in and buy out scaling thresholds if you want to hold on to the money you do make. Check the earnings calendars and preceding price movement and do your homework on these companies, and you can push back against the prevailing market trend with a little post-earnings announcement drift plays.
Early March shows the signs of a market topping out for some short term upward price action relief on the indexes, and the waters across all sectors are choppy with many overbought securities cresting and reverting back to the mean. Gold was up but has fallen from its peak, and now the VIX volatility indicator is beginning to rise slowly. We have enjoyed a solid January bullish run up, but February has been mostly stagnant with profits difficult to find outside of the market index funds.
On the technical side, MACD is beginning to fall with a negative and falling faster over the last 5 days foreshadows a possible bearish break out if this downward action doesn't have a silver lining soon. The ADX trend strength indicator shows that we never really hit a strong bullish trend and it is beginning to approach a below 20 crossing hinting at a possible trend reversal. Directional movement indicators DI+ and DI- are rapidly approaching a crossing over with short term bearish price action threatening a horizontal consolidation before any of us knows what to make of it yet. RSI did just barely top 70 on this run up, so the market wasn't terribly overbought (we can thank a lukewarm February for that), but it's not a strong enough uptrend to guarantee that prices will rebound and stay up for too long. The Chaikin Money Flow indicator is still postive but falling, suggesting that we still have more buyers than sellers, but it's threatening to reverse on everyone.
Be sure you practice a disciplined approach to trading if you choose to do so. Lower capital investments may want to consider staying with market and sector and asset class index funds for the present, and those investing in individual securities show exercise caution by testing the waters with a small buy in before scaling in and out of your positions.
Early March shows the signs of a market topping out for some short term upward price action relief on the indexes, and the waters across all sectors are choppy with many overbought securities cresting and reverting back to the mean. Gold was up but has fallen from its peak, and now the VIX volatility indicator is beginning to rise slowly. We have enjoyed a solid January bullish run up, but February has been mostly stagnant with profits difficult to find outside of the market index funds.
On the technical side, MACD is beginning to fall with a negative and falling faster over the last 5 days foreshadows a possible bearish break out if this downward action doesn't have a silver lining soon. The ADX trend strength indicator shows that we never really hit a strong bullish trend and it is beginning to approach a below 20 crossing hinting at a possible trend reversal. Directional movement indicators DI+ and DI- are rapidly approaching a crossing over with short term bearish price action threatening a horizontal consolidation before any of us knows what to make of it yet. RSI did just barely top 70 on this run up, so the market wasn't terribly overbought (we can thank a lukewarm February for that), but it's not a strong enough uptrend to guarantee that prices will rebound and stay up for too long. The Chaikin Money Flow indicator is still postive but falling, suggesting that we still have more buyers than sellers, but it's threatening to reverse on everyone.
Be sure you practice a disciplined approach to trading if you choose to do so. Lower capital investments may want to consider staying with market and sector and asset class index funds for the present, and those investing in individual securities show exercise caution by testing the waters with a small buy in before scaling in and out of your positions.
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