My macro indicator declined to -15; at this rate, it's possible that it will give a "sell" signal next week. However, as I mentioned in my post last week, one of two confirming indicators will need to "fire" as well. The levels to watch are as follows:
For a RSI divergence, the S&P 500 would need to meet or exceed 2868.88 next week and close below 2826.05. Alternatively, for a trailing ATR3 stop confirmation, the S&P would need to break 2759.18 to the downside.
Given the attention on a trade deal with China, I wouldn't be surprised if the market meanders into June and possibly rise on hopes of a positive outcome. However, I don't believe that it will change the "complexion" of the market.
If my macro indicator goes below -20, I will execute my sell strategy as detailed in a prior post and I'll be looking to see when the indicator reverses to the upside. Although market troughs or bottoms are challenging to predict, my macro indicator is showing that a possible bear market in stocks could extend well into next year. Stay tuned.
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.
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