by Daniel » Tue Sep 25, 2018 2:12 pm
=> Re-post (but still timely):
9/17 J.C. Parets sets out some 'lines in the sand'..
"The evidence continues to point to an environment where stocks are being accumulated, breadth is expanding, and sector rotation rules. My conclusion is simply this: there are more stocks that I want to be buying than stocks I want to be selling. And this is by an overwhelming amount. It’s not even close.
Small-caps and Mid-caps have been the leaders. As bulls, we want to see that remain the case. So if we’re below 170 in IWM, a more neutral approach is best. But above that and we want to remain aggressive from the long side.
The S&P500 is attempting to hold a breakout from an 8-month base. If we are above 2870 then we want to be buying stocks very aggressively. From a risk management standpoint, a more neutral approach in the short-term is certainly warranted if we’re below it.
From an upside confirmation perspective, the Dow Jones Internet Fund FDN holding above 140 would be constructive for the tech sector. The Software Fund IGV holding above 188 is a key level. If we’re below that, then something is likely wrong and a more neutral approach towards equities short-term is probably best.
Berkshire is important to the Financial indexes. If we’re above 200 in BRKB this is further evidence to me that we need to be aggressive from the long side. Healthy price action in BRKB is good for the Financials in general, and therefore the rest of the US Stock Market as a whole."
..Of these "dividing lines", the price of IWM and FDN have dipped below their warning levels over the past days, but both are currently back above. The others have been holding comfortably above.