Strong and rising trends in CRB Index, gold, and yields on the 10 year Treasury
persist, and collectively, this represents a headwind for equities. I last
highlighted our composite indicator constructed from the trends in the CRB
index, gold, and yields on the 10 year Treasury on February
18, 2011. Below I provide some links to a strategy that utilizes this indicator
as a fundamental filter with the simple 40 week moving average on the SP500.
To review the strategy and its development, please click on these links:
Figure 1 is a weekly chart of the SP500 (symbol: $INX) with the indicator
in the lower panel. The indicator remains in the extreme zone suggesting that
equities face headwinds. The "short" and "cover" signals over the price bars
represent recent times when this indicator was extreme.
Figure 1. SP500/ weekly
Lastly, if we look out a week or two it appears that these pressures are likely
to continue.
Disclaimer: Guy M. Lerner is the editor and founder
of The Technical Take blog. His commentary on the financial markets
is based upon information thought to be reliable and is not meant as investment
advice. Under no circumstances does the information in his columns represent
a recommendation to buy or sell stocks. Lerner may on occasion hold positions
in the securities mentioned in his columns and on the Web site; in all instances,
all positions are fully disclosed at http://thetechnicaltakedotcom.blogspot.com/.
However, their positions may change at anytime. For more information on any
of the above, please review The Technical Take's full Terms of Use and Privacy
Policy (link below). While Lerner cannot provide investment advice or recommendations,
he invites you to send your comments to: guy@thetechnicaltake.com.
Copyright Notice: Except for making one printed
copy of this newsletter or any other materials, files or documents available
from, accessible through or published by TheTechnicalTake, LLC for your personal
use (or downloading for the same limited purpose), none of these said materials,
files and/or documents may be reproduced, republished, rebroadcast or otherwise
re-distributed without the prior expressed written permission of Guy M. Lerner.
Circle Us