Stock Market Rally is Over, Doji Dejavu
Stock-Markets / Stock Index Trading Aug 30, 2009 - 11:39 AM GMTBy: Lynn_T
Doji Dejavu
It is happening all over again.
Welcome to Lynn T's 1-2-3 PLUS Alert. To learn more about my Partial Leverage Utilization System, click here.
Boy, this brings me back. All the way back to two weeks ago. At that time, we had a doji candle, which made me think the rally was over and that the market would continue sideways to slightly lower. Then we had a rough start to the week only to end higher. Now here we sit. Have I changed my outlook?
No. I still believe the rally is over and that we will continue sideways to slightly lower before gaining momentum to bring us back up to the 135 level. Does that mean we're stepping back from our bullish positions to be in line with what I think?
No. As I've said before and I'll say until I'm blue in the face, we follow a system through thick and thin. The last of my indicators has turned bullish, so we are going to be adding the final 1/3 bullish position to our weighting.
Add 1/3 bullish position (see new weighting below).
Current Weighting Suggestion:
3/3 in Bullish Leverage
Long Term Investor Buy Signal Alert
Over the past several years, this indicator has predicted several 100-point or more moves in the S&P. There are only 2 to 3 of these signals every year, so they're worth paying attention to. This is an ideal signal for investors to put cash to work following a down move in the market.
There is no long term investor buy signal at present.
Past Long Term Investor Buy Signals
March 18,2009 - resulted in an advance of around 235 over 4 months
October 29, 2008 - resulted in an advance of 76 points over 4 days.
July 23, 2008 - resulted in an advance of 34 points over 3 weeks.
Long Term Investor Crash Warning Indicator
This indicator is a variation of the widely published Hindenburg Omen. We'll let you know when we're seeing indications of a potential crash to come. This would be a good time for long term investors to take some money off the table.
This indicator is not coming into play at this point in time.
You can email me with any questions at plus@stockbarometer.com.
Have a great week!
Lynn
To learn more about my Partial Leverage Utilization System, click here. This service is available for $21.95/month or $209/year. To try my service, click here.
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