Our Current Market Outlook was downgraded to “Uptrend Under Pressure” with a yellow light (SPX @ 3,981.05) at 1pm today. Currently our “Core Four” (see top of page) has 2 green, 1 yellow and 1 red light.
The major indexes recent bull phase, while still intact, is coming under measurable internal pressure. This time of year can experience various types of cross-currents in the internals. As an example, new lows readings can remain elevated due to year-end tax-loss harvesting. Trillions of dollars are jockeying for position as the end of the quarter, and the year, draws near.
This week in particular features very important economic data (Wednesday through Friday) that will have a significant influence on the interest rate outlook and the Fed’s likely path. Those pending announcements coupled with the civil unrest in parts of China have caused the internals in the stock market to deteriorate to such a degree to cause a downgrade to yellow in our C.M.O. signal.
The chart set-ups on the main indexes are still constructive but any further advance in the recent bull rally will be dependent upon good data coming later this week. The market is at a serious crossroad, a flash point, and it is just as possible that our signal could be green one week from now as it could be red.
Game plan: Expect violent price movements ahead. If good data is pending and the rally is going to expand, expect the S&P 500 to move above its 200-day mav quickly and sharply. Do not cease to employ risk management though, as the data could be seen as negative and cause a violent 2 – 3 day drop to the S&P 500’s flattening 50-day mav.
Note: You can learn more about The Triumphant Core Four risk management system by clicking here.
Have a Triumphant day! ®
The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2022 Triumphant Portfolio Management, LLC.
Where Are Woodward and Bernstein When We Need Them? This article was written by Newt