As of Tuesday, July 26, 2016 at the close of trading EquitySurge™ has continued a hold signal for USA equities. This signal means to hold existing long stock market positions, but do not buy additional positions.
There was strong evidence during today’s trading session that the S&P500 Index has most likely topped in price for the time being, and a corrective phase down is going to begin soon.
This decline should produce a nice buying opportunity as long as the liquidity situation remains as bullish for stocks as it has been. We will watch this closely.
Volatility will probably increase during this decline phase, and it could do so dramatically, so expect some much wider trading ranges during the days to come than we’ve been having recently.
Pullbacks, downtrends and corrections are a normal part of the stock market, and even though this impending decline phase could look and feel dramatic as it runs its course, we still think the best strategy is to hold existing long equity positions, and be ready to buy and add at lower prices.
This corrective phase looks to be targeting the 2120-2100 level on the S&P500 Index, but we will update this target as we carefully monitor the liquidity (money flowing into the stock market) situation as the pullback unfolds.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.