I haven’t posted anything on the blog lately because there hasn’t been much to talk about in terms of new updates. Overall, things have been playing out “to a T” this month, following the same playbook as back in October/November (you can read about it here). Early April is when we’ll start to see whether the analog will continue or break off on its own path. I haven’t bought any new stock positions for a few weeks now (just happy to hold the great ones we currently own) but we may get the chance in the weeks ahead.
Today’s chart shows you some of the nitty, gritty details of the stuff I do behind the scenes. This is a system I developed that measures the stock market’s short-term internal strength and weakness to indicate times when I’m clear to buy anything I’ve been wanting to pick up/add to (colored green) and times that I should wait or even look to take profits (colored red). I don’t use this as an all in/out trading system, but rather a guide for when to be patient and when to be on high alert to take action.
S&P 500 – 1 year (daily chart)
Notice that this is only the second time in the last year that red bars are popping up. Here’s how it looks over the last 2 years:
S&P 500 – 2 years (daily chart)
There’s no way to know how big the drop might be following red colored bars, or even if a drop will actually occur, but historically you almost always get a chance to buy at lower prices a few days or a few weeks after red bars appear. Most of March has been colored red so I’ve been in waiting mode but I always have a shopping list ready. Hopefully we get a chance to buy some stuff on sale soon!
Have a great weekend and thanks for following!
-Nick
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