Patience

So the market rebound is obviously impressive and key levels are being penetrated that would normally cause me to jump back in. Most notably, the trailing ATR3 stop at 2044 broke today on an intra-day basis. I'll assess the technicals and ensure that money flow indicators confirm the health of the upward move before jumping back in.

Weekly recap

I executed two major trades by selling a total of 75% of core positions at two key levels 2040 and 2027. As usual, I could have done even better if I had sold earlier (i.e., not waiting until both of my longer-term indicators were showing negative divergences). Even if this correction is short-lived, it feels good to have taken some profits off the table. It's not clear what the re-entry point will be. There is some support in the 2000 region, but if the market doesn't hold here, I would be looking for support in two areas -- either 1945 or 1905-1920. The macro indicators are still pointing to a positive 2015 until at least August.

Took some profits

My short-term indicator flashed a sell signal last Friday but even though other short-term indicators I track (e.g., money flow) were confirming that a correction was possible, I didn't take any action. I didn't because, the longer-term (weekly) indicators such as RSI were not yet tracing any divergences. My objective for this week was to watch out for any divergences (i.e., a close below 2072) and to possibly take profits on 50% of core positions. Given the nature of weekly indicators, I would normally wait until Friday to draw any conclusions. However, given the apparent shift in momentum, I took sold 50% of my core positions this morning at S&P 2040. The next key level is 2027 which represents the ATR4 trailing stop. A break of this level will lead me to sell 75% of remaining open core positions.

All in !!

As planned, I bought the market (with 100% of idle cash) when it broke above the trailing ATR3 stop at 1910. Unfortunately, the market gapped up so the best I could do was to enter the market at 1920.

Update on my macro indicator and a possible market top near August of 2015

Just a quick note: My macro indicator has declined for a second consecutive week. The indicator value at it's peak was 171 and it now stands at 104. It would need to fall below a certain negative level before I can make the call of a possible market peak sometime near August of 2015.