My macro indicator dropped again this week to -10. Consequently, I continue to formulate a game plan to execute in the event the indicator declines to -20 or less. In the last 18 years, every time my macro indicator reached this extreme level, the S&P 500 has declined more than 20%. In this post, I will discuss key levels and other technical indicators that must trigger to confirm my macro indicator.
As I mentioned in a prior post, I will check two confirming indicators if my macro reading goes down to <= -20. Currently, these two indicators - Weekly RSI divergence and the Weekly ATR3 stop - haven't been triggered. The RSI divergence indicator will trigger if the S&P meets or exceeds 2892.15 sometime next week and closes below 2859.53 on Friday. The ATR3 stop - a slower, less sensitive indicator - will trigger if the S&P declines below 2759.19. An exit after a RSI divergence will likely lead to a sell signal more favorable (profitable) than the slower ATR3 stop. In either case, my primary and secondary indicators (working together) will give me more confidence to support my sell strategy.
Have a nice weekend.
Follow signals from the Prophet4Traders system to identify turning points in the U.S. stock market
The purpose of this site is to share results of a trading system that I use for identifying both long-term and short-term trading opportunities. I take the time to do this because of my passion for investing and helping others succeed. The system helped me avoid the "Crash of 2007/2008" and every major correction since then. The cornerstone of my trading system are analyses of market liquidity to gauge longer-term market sentiment and equity and index options (put/call ratios) to identify short-term entry and exits.
This site is for information purposes only. Past performance of the trading system is not a guarantee of its future success. Please consider consulting a qualified investment adviser before making investment decisions.