STILL NO DECISIVE MOVE
Chart Spotlight
by Carl Swenlin
DecisionPoint.com
January 8, 2010
EDITOR'S NOTE: Timer Digest has released their results for 2009. Decision Point Alert ranked #9 for one-year timing with a gain of +29% versus a +23% gain for the S&P 500. We ranked #6 for long-term (2 years) timing with a gain of +36% versus a loss of -24% for the S&P 500. We did not make the top five for gold or bonds.
One would think, after a three-week hiatus, that there would be plenty to write about the market. But there isn't. The S&P 500 has drifted higher in an ever-narrowing ascending wedge pattern, making little progress. Since the mid-October top, the S&P 500 has only gained about 40 points. You can see on the chart that the price index has kind of oozed above the top of the wedge, but only by a tiny amount, and certainly not decisively. In my opinion, the ascending wedge has not yet been resolved, and the most likely resolution will be to the down side.
While I think a medium-term top is a strong possibility, I have no reason to think that a long-term top is likely. My Chart Spotlight article of 12/18/2009 still reflects my view for all time frames. Our Thrust/Trend Model (T/TM) is still on a buy signal as of 3/17/2009.
Bottom Line: We have been in an extended period of low volatility, and a period of high volatility is sure to follow. That will probably materialize as a medium-term correction; however, the long-term technical outlook is positive.
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MECHANICAL MODELS
We rely on our mechanical trend models to determine our market posture. Below is a recent snapshot of our primary trend-following timing model status for the major indexes and sectors we track. Note that we have included the nine Rydex Equal Weight ETF versions of the S&P Spider Sectors. This may seem redundant, but the equal weighted indexes most often do not perform the same as their cap-weighted counterparts, and they provide a way to diversify exposure. Daily tracking of these signals is available to subscribers in the Decision Point Alert Daily Report.
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Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics and strategy if conditions change.
© 2010 Carl Swenlin
Editorial Archive
Contact Information
Carl Swenlin
President
DecisionPoint.com
Redlands, CA USA
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