No signal today

My indicator dropped to -4; not enough to trigger a trade.  Have a nice weekend!

Anxiously awaiting market data

With the events of this week, I'm anxiously awaiting market data to update my macro indicator -- the data is published every Friday at 12:30.  Given the possibility that I will get a sell signal on Friday, I wanted to share what I plan to do.  Consistent with my overall strategy, upon a sell signal, I will:

1.  Sell my holdings in market-beta (S&P 500 index) and all high-beta (e.g., high tech stocks) - this
     comprises about 20% of my portfolio
2.  Sell profits in all dividend stocks which have appreciated 10% or more - dividend stocks comprise
     about 80% of my portfolio

Note that a sell signal will encompass two elements:  A macro indicator reading of -20 or less and one other long term technical signal (e.g., negative weekly RSI divergence).

Given that fact that your investment strategy differ might differ from mine, you should contemplate ways to reduce risk and at minimum, rebalance your portfolio.  Some of you that subscribe to my email updates will get this post Friday morning.  If I get a sell signal, I will try to publish a short post shortly after 12:30 on Friday -- note that Google distributes email updates one day later.  My capabilities to publish an update will be hampered by the fact that I will be traveling tomorrow.

Market might be nearing medium / long-term peak

My macro indicator dipped this week to a reading of 5.  It was 24 last week.  This continued deterioration is concerning.  As mentioned many times before, a reading of -20 will likely cause me to take action to reduce my equity exposure.  If necessary, I will post an update next Friday.

Paying more attention

My macro indicator is continuing to decrease and is now at 24.  As you might recall, I consider a dip below -20 significant (see red line below).  Given the continued possibility that the indicator could reach this level, I'm extending the window for a possible top.  In my past posts, I sited a possible top in early May.  Because the indicator has taken so long on its path downward (and because it's almost May), I'm now looking at a window extending to the secondary top on or about July 10 as shown below.  Each of the subsequent minor tops in September and November provides possible timeframes for a peak in the S&P 500 if my indicator dips to -20.  Stay tuned......

Broken Record: Continued deterioration but the pace hasn't accelerated

The "value" of the macro indicator now stands at 54 -- As I mentioned in prior posts, I would become worried once it falls to -20 or less.  So for now, I'm staying the course.  It's times like this that I value the benefit of macro indicators because with the ebb and flow of news headlines about an impending recession, it's easy to become an "emotional investor." 

With that said, I'm still assessing the possibility of an early-May top.  If the indicator falls below -20 before then, the signal from my indicator will be relatively clear.  However, if it (the indicator) falls sometime afterwards (without first making a new or intermediate high), it will become more challenging to "find" the top in the S&P.  I'll worry about this when the time comes.