I did not post much last week because not much has changed. The game plan remains the same.
There is obvious resistance on the SPY chart in the $115-117 area. Momentum is extended (RSI 14 above 70) and it is unlikely that we would see this kind of resistance breached without some of this momentum burning off (sideways action, small dip).
I have my opinions like everyone else, but I don’t have a magic system to tell me whether the market is going to continue higher. What I do have is a system to manage risk and positions in a methodical way.
I mentioned last Sunday that I didn’t expect to add to my positions last week. I nudged up my portfolio from 25% invested to 29% invested. I would expect this week to be more of the same.I just think we need a little more time to see these major resistance levels taken out before the market can go higher.
So is sideways or even a small selloff a bad thing? Nope. Every trading day that passes is another day for the moving averages to catch up with the current price (momentum burn). So while my portfolio basically stayed in neutral last week, I was able to move up my stops just a touch last week. The higher my stops go, the closer I get to being a position where only profits are at risk.
Before I continue, here is my Sunday moving average table. Nothing worth updating from last week.
| Primary Trends | 3/21/2010 |
| 50 day MA – SPX | Above |
| 100 day MA – SPX | Above |
| 200 day MA – SPX | Above |
| 300 day MA SPX | Above |
| 50 day MA -QQQQ | Above |
| 100 day MA – QQQQ | Above |
| 200 day MA – QQQQ | Above |
| 300 day MA -QQQQ | Above |
| 50 day MA – PGJ | Above |
| 100 day MA – PGJ | Above |
| 200 day MA – PGJ | Above |
| 300 day MA – PGJ | Above |
| 50 day MA – IWM | Above |
| 100 day MA – IWM | Above |
| 200 day MA – IWM | Above |
| 300 day MA – IWM | Above |
| 50 day MA – GLD | Below |
| 100 day MA – GLD | Below |
| 200 day MA – GLD | Above |
| 300 day MA – GLD | Above |
| 50 day MA – SLV | Above |
| 100 day MA – SLV | Below |
| 200 day MA – SLV | Above |
| 300 day MA – SLV | Above |
| 50 day MA – PTM | Above |
| 100 day MA – PTM | Above |
| 200 day MA – PTM | Above |
| 300 day MA – PTM | Above |
| 50 day MA – USO | Above |
| 100 day MA – USO | Above |
| 200 day MA – USO | Above |
| 300 day MA – USO | Above |
| 50 day MA – UNG | Below |
| 100 day MA – UNG | Below |
| 200 day MA – UNG | Below |
| 300 day MA – UNG | Below |
| 50 day MA – SGG (Sugar) | Below |
| 100 day MA – SGG (Sugar) | Below |
| 200 day MA – SGG (Sugar) | Below |
| 300 day MA – SGG (Sugar) | Below |
| 50 day MA – LD (Lead) | Below |
| 100 day MA – LD (Lead) | Below |
| 200 day MA – LD (Lead) | Above |
| 300 day MA – LD (Lead) | Above |
| 50 day MA – NIB (Cocoa) | Below |
| 100 day MA – NIB (Cocoa) | Below |
| 200 day MA – NIB (Cocoa) | Below |
| 300 day MA NIB (Cocoa) | Below |
| 50 day MA – JO (Coffee) | Below |
| 100 day MA – JO (Coffee) | Below |
| 200 day MA – JO (Coffee) | Below |
| 300 day MA – JO (Coffee) | Below |
| 50 day MA – JJG (Grains – Corns, Soybeans, Wheat) | Below |
| 100 day MA – JJG (Grains – Corns, Soybeans, Wheat) | Below |
| 200 day MA – JJG (Grains – Corns, Soybeans, Wheat) | Below |
| 300 day MA – JJG (Grains – Corns, Soybeans, Wheat) | Below |
| 50 day MA – JJN (Nickel) | Above |
| 100 day MA – JJN (Nickel) | Above |
| 200 day MA – JJN (Nickel) | Above |
| 300 day MA – JJN (Nickel) | Above |
| 50 day MA – JJC (Copper) | Above |
| 100 day MA – JJC (Copper) | Above |
| 200 day MA – JJC (Copper) | Above |
| 300 day MA – JJC (Copper) | Above |
| 50 day MA – BAL (Cotton) | Above |
| 100 day MA – BAL (Cotton) | Above |
| 200 day MA – BAL (Cotton) | Above |
| 300 day MA – BAL (Cotton) | Above |
| 50 day MA – COW (Livestock) | Above |
| 100 day MA – COW (Livestock) | Above |
| 200 day MA – COW (Livestock) | Above |
| 300 day MA – COW (Livestock) | Above |
| 50 day MA – $USD | Above |
| 100 day MA – $USD | Above |
| 200 day MA – $USD | Above |
| 300 day MA – $USD | Below |
| 50 day MA -LQD | Above |
| 100 day MA – LQD | Above |
| 200 day MA – LQD | Above |
| 300 day MA – LQD | Above |
| 50 day MA – FXE | Below |
| 100 day MA – FXE | Below |
| 200 day MA – FXE | Below |
| 300 day MA – FXE | Below |
| 50 day MA – FXA | Above |
| 100 day MA – FXA | Above |
| 200 day MA – FXA | Above |
| 300 day MA – FXA | Above |
| 50 day MA – FXB | Below |
| 100 day MA – FXB | Below |
| 200 day MA – FXB | Below |
| 300 day MA – FXB | Below |
| 50 day MA – FXC | Above |
| 100 day MA – FXC | Above |
| 200 day MA – FXC | Above |
| 300 day MA – FXC | Above |
| 50 day MA – FXY | Below |
| 100 day MA – FXY | Below |
| 200 day MA – FXY | Above |
| 300 day MA – FXY | Above |
| 50 day MA – FXF | Below |
| 100 day MA – FXF | Below |
| 200 day MA – FXF | Below |
| 300 day MA – FXF | Above |
| 50 day MA – JNK | Above |
| 100 day MA – JNK | Above |
| 200 day MA – JNK | Above |
| 300 day MA – JNK | Above |
| 50 day MA – TLT | Above |
| 100 day MA – TLT | Below |
| 200 day MA – TLT | Below |
| 300 day MA – TLT | Below |
| 50 day MA – $VIX | Below |
| 100 day MA – $VIX | Below |
| 200 day MA – $VIX | Below |
| 300 day MA – $VIX | Below |
When I was pushing up stops, I noticed that some of my positions were at good buy points. Here are a few examples:
V: All time high breakout on 3/8/10 at $88. Stock moved up over $92 and is now retesting the breakout.
GOOG: The stock has been bouncing on the Google.cn news. There is a confluence of support that the stock is respecting at $554. Not a bad place to take a shot at the stock. The $545 level could be used as a tight stop and the $520 level (recent low) can be used for a wider stop.
MA: Similar to GOOG. Confluence of support at $240 level.
I expect this week to be pretty slow. For the reasons mentioned last week, I think the market will continue higher but I’m not so sure it ready to do so this week. The market will dictate, but I’m not expecting to add positions this week. I likely won’t raise my amount invested until (and if) the major indexes take out these major resistance levels sitting in front of us. Being patient. That will likely take weeks, not days.