BACK TO FULLY INVESTED
I’ve bumped my invested percentage up to 50%-stocks, but I am still treating
this as a trade. The S&P 500 needs
to get back above the 200-dMA and that is now at 1906. After that, the area now around 1925 needs to
be broken to the upside.
The markets are still improving.
As of 11 AM new-highs were outpacing new-lows, not by much; but it is a
positive sign. There were 20-new lows as
of 11AM. At the low last Wednesday there
were almost 600 new lows at 11 AM so this is a big turn-around and implies a
correction end. Nothing is written in
stone though and corrections usually last longer than 20-days top to bottom as
this one has so far. For example, in May of 2010 there was a technical bottom
that was a successful test of a prior low, but it was only 29-days from the
prior high. That low was retested and
failed. The final low was about a month
later and 4% lower.
Previously in February 2010, there was a correction that only lasted
29-days and it did not retreat again until several months later.
In short, the low of last Wednesday may or may not hold. My guess is that if it does not hold, a
final bottom might be another 5-8% lower.
