Due to people feeling a bit nervous and anxious about current market conditions, we thought we would send you a quick update. We still believe the market will, at minimum, test the high established in April before we see a real bear market, however we are not predicting a bear market as we are not in the fortune telling business! We react to the market, we don't try to outsmart it and right now the market has not shown any signs of a bear market, but that doesn't mean it won't come but nevertheless our strategy is to go with the trend until the end.
[caption id="attachment_560" align="aligncenter" width="300"] May 19th Market Update Chart[/caption]
We are still seeing higher lows and higher highs so the trend is still up. If you look at the chart of SP-500 you can see those higher lows and higher highs. Also see that the every time we break a trendline we just form a new trendline with a lesser slope than previous trendline. Trendline 3 has almost no slope but it's still uptrending. This tells us that we need to be extra alert but still lean towards longs.
The chart is indicating that the right thing is still to buy the pullbacks. That doesn't mean we just jump in without a plan or without a good risk to reward. We are waiting for sign of smart money flowing in before dipping our toe in the water and then if the market proves us correct we will add to our winning positions.
We are keeping an eye on some sectors which are experiencing smart money buying, but as long as the market as a whole is still seeing selling pressure we are waiting on the sideline and right now Cash is King.
As always, we will keep you updated if the market suddenly changes behaviour.
May 19th Market Update Chart[/caption]
We are still seeing higher lows and higher highs so the trend is still up. If you look at the chart of SP-500 you can see those higher lows and higher highs. Also see that the every time we break a trendline we just form a new trendline with a lesser slope than previous trendline. Trendline 3 has almost no slope but it's still uptrending. This tells us that we need to be extra alert but still lean towards longs.
The chart is indicating that the right thing is still to buy the pullbacks. That doesn't mean we just jump in without a plan or without a good risk to reward. We are waiting for sign of smart money flowing in before dipping our toe in the water and then if the market proves us correct we will add to our winning positions.
We are keeping an eye on some sectors which are experiencing smart money buying, but as long as the market as a whole is still seeing selling pressure we are waiting on the sideline and right now Cash is King.
As always, we will keep you updated if the market suddenly changes behaviour.