Heinz,
As previously mentioned I have a CLASS 2 SELL signal on the SPX, and an upper midrange reading for the DOW and if the SPX gets to 1405 range on Monday it will ring a CLASS 1 SELL signal with the buy-in MON/TUE. In an up market, I do not go with a CLASS 2 signal, but just consider it as a sign to get ready for the CLASS 1. Its obvious that the intermediate trend is still up, but of course we have the FOMC meeting which could change that, depending on the outcome.
Again, shorting this market is very dangerous. Unfortunately I cannot rely on my technicals in light of the importance of the FOMC meeting influencing the direction of the market.
Concerning sector rotation. Im inclined to say that if the news is good where rates are not increase and there bias is eliminated, the DOW could move up strongly but that the NAZ may lag or even sell off some, and the SPX will move in the middle of the NAZ/DOW as it is now.
If rates are raised there should be be selling of, and if the bias is continued then that should intensify the selling. The likelihood is that once the selling is over it should still be a buying opportunity. Of course if the selling is really extreme establishing LOWER LOWs then this intermediate uptrend is over, but that is less likely.
Although I am now intermediately bullish per my technicals, subjectively, I cannot totally ignore the overly bullish sentiment, which could be a contrarian indicator.
My long-term view of the SPX reaching a P/E of 15-20 within 5 years, still is unchanged since the market internals are still weak and have not improved significantly.
seeya |
