Sunday, October 2, 2016

Sitting on the Sidelines

Last week the SPX gained 3 points roughly trading between 2142 and 2172 with strong resistance provided by the 50 DMA.  The indicators I follow also showed little net movement, but the VIX P/C may have bottomed with a move from the .30s to the .60s on Friday.  I have been looking for one last move up in the EMAs to match the May 2015 top.

The Short Term Indicator has moved down closer to neutral, but I expect a move down to near the SELL line similar to July-August of 2015 to indicate a selling opportunity.

The Overall Indicator Scoreboard is following a similar pattern timing wise to the ST Indicator and should decline more before a shorting opportunity.

Conclusion.   As the last two weeks have pointed out, sometimes sitting on the sidelines is the safest investment strategy.  November looks to be a pivotal month.

Weekly Trade Alert.  October option expiration week has provided upside surprises more often than not.  So I will be watching this week for a long setup.  No guidelines for now.

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