Some of my readers will recognize my previous work from the Reversion to the Unified Mean (RUM) Wave blog. I wrote it in relative anonymity for a couple years. That work can now be found here.
Today we saw a market under bearish pressure. When I started my most recent bullish position, I noted that it was a risky and somewhat uncertain trade based on a "weak" buy signal. The RumWave chart had never met the criteria to buy, it was more of a hunch and a desire to not miss out in case the market took off. Now that weak buy signal has been confirmed as invalid. Today I moved into an all cash position (at break even on the trade) as I await the next signal. The market ended the day somewhat oversold, so we probably won't see a big gap down tomorrow at the open. More likely would be a "dead cat bounce."
The scores above are at astonishingly low levels for the RumWave score, but my "buy criteria" has not been met on the RumWave chart.
FAIR WARNING: There is a significant bearish divergence on the DJIA daily chart that some of my favorite bloggers are not yet talking about (makes me wonder if I'm the crazy one). The last two market peaks made higher highs (albeit only very slightly higher) while the RSI, Slow Stochastic, and MACD have made lower highs. Previously this predicted large market sell offs by a few days to a few weeks. I suspect the market may make one more attempt to break out to new highs before such a sell off occurs.
TSP GAMEPLAN: 100% G fund. Get your ship in the harbor for a while (sts).
Questions or comments? Email me: firstname.lastname@example.org
GOOD LUCK TOMORROW!