8/19/2007 10:20:26 AM
Has the current market given us a signal? Read on to find out.
Stock Barometer Analysis
The barometer has issued a Buy Signal, placing us in Buy Mode.
The Stock Barometer is my proprietary market timing system. The direction or slope and level of the Stock Barometer determine our outlook on the market's direction. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. All the information contained in this email is considered in making our calls.
Stock Barometer Cycle Time
Monday will be day one in our Up Cycle.
The Stock Barometer signals follow 5, 8, 13, 21 and sometimes 34 day Fibonacci cycles that balance with 'normal' market cycles. Knowing where you are in the current market cycle is important in deciding how long you expect to maintain a position.
Potential Cycle Reversal Dates
2007 Potential Reversal Dates: 1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15, 8/29. We publish these dates up to 2 months in advance.
Looking for a move higher into 8/29 then a retest.
My Additional timing work is based on numerous cycles and has resulted in the above potential reversal dates. These are not to be confused with the barometer signals or cycle times. However, due to their past accuracy I post the dates here.
2006 potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28. 2005 Potential reversal dates based on 'other' cycle work were 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.
The following work is based on my spread/momentum indicators for the QQQQ, SPY, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.
QQQQ Spread Indicator (NASDAQ:QQQQ)
The QQQQ Spread Indicator will yield its own buy and sell signals and may be in Buy and Sell Mode that is different from the Stock Barometer. It's meant to give us a idea of the next turn in the market.
Gold Spread Indicator (AMEX:GLD)
I monitor Gold in the form of AMEX:GLD (and the XAU) as well as the US Dollar Index below as a general guide to the overall health of the US Economy and the markets, as well as to assist us in the entry of positions in our stock trading service.
US Dollar Index Spread Indicator (INDEX:DXY)
To play moves in the US Dollar, utilize the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund.
Bonds Spread Indicator (AMEX:TLT)
We recommend trading Lehman's 20 year ETF AMEX:TLT. Note that the direction of bonds can have an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.
OIL Spread Indicator (AMEX:USO) *NEW*
We look at the price of oil as its level and direction can have an impact on the stock market, which we'll examine over the coming months and years.
Supporting Secondary Indicator
I have over 100 technical indicators, some that are widely followed and some that are proprietary. These indicators break down the market internals, sentiment and money flow and give us unique insight into the market. I feature at least one here each day in support of our current outlook.
Summary of Daily Outlook
We have a Buy Signal, placing us in Buy Mode.
There is still a possibility of a retest of Friday's low - but given the Fed jumping in to support the market and the general rule of thumb that you don't fight the fed, I see a move higher into 8/29 - our next key reversal date.
Looking further out, once the bounce is over, I see a move back down to visit these lows again - probably around October. Then it's off to the races.
If you have any questions or comments, email me at Jay@stockbarometer.com.