Today’s Market Mood

GoSign

THE MARKET MOOD

May 2017

Gordon Says:

“Despite the 1.77% one-day drop in the S&P 500 mid way through the month, the GO-sign indicator is still in place and likely to remain so once the dust settles.  Market crashes come fast and sometimes with very little warning, but one-day drop was not evidence of a crash. It was however a potential warning. The markets will have to show increasing volatility and selling for another six weeks before the GO-sign would change to a STOP, so patient investors may soon be rewarded in late May or early June.”

Gordon

 

Toni Says:

Throughout May, the market has been sanguine and serene, and broadcasting a GO signal.

 Still, we suspected a drawdown was in the making . . . it has been long overdue.  Of course, the question in the front of traders and investors minds is always. . . when will it take place?

 Our answer: Markets fell on May 17, after a prolonged run to the upside and then a lengthy consolidation period.

 Despite the fall, the SPDR S&P 500 (SPY), remains at a premium to its 12-month moving average (which currently trades at $224).

 In our current environment, headwinds abound:  North Korea continues to make threats, the US political scene remains volatile, and of course, the Federal Reserve is on track to raise interest rates in mid-June (which may, or may not shake markets).

 We will keep an eye on the SPY to see if it remains above our 12-month moving average—and maintains its “GO” signal. Should it slip below that line, we will become defensive.

Keep green on your screen!

Toni

 

 

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