As I mentioned in my last post, I would put surplus cash to work if the S&P 500 forms a weekly RSI (positive) divergence. I would be looking for signs of this next Friday. A positive divergence would occur if during the week (1) the S&P penetrated the low of this week (2710.51), and (2) closed the week at or above this week's close of 2767.13. If the market forms a "V" bottom without a positive RSI divergence, I will not chase the rally. I much prefer to put money to work when technical "basing" patterns are formed.
In regard to longer-term projections, my macro indicator is again weakening -- it has turned down again after "trying" to form a new high. See image -
The indicator's current value is 204 and would need to go below -20 (the red line) before I would call a market top. If the indicator continues to fall to this level, I would anticipate a top around April of 2019. In my view, it's way too early to be overly defensive.
As usual, I'll update this blog if I take any action and or change my outlook.
