As of Monday, August 1, 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.
Stocks rose from the opening bell this morning, but the buying quickly turned into selling after oil futures dropped down below the 40 dollar level. After making an intraday record high around the 2178 level, the S&P500 Index closed near 2171.
Oil and liquidity indicators are warning of an impending downturn in stocks, and the action in both today only confirmed that forecast. It is looking as if the stock market may experience a sudden and steep drop in price that could begin at any time.
While the oil selloff and the drop in liquidity (money flowing into the market) are predicting what might be a scary drop in stock prices, at this point all indications still are that this drop will be a buying opportunity.
So we remain in the same posture we have been in for the past couple weeks, which is holding existing longs, expecting a steep but quick drop in the stock market that will lead to an excellent chance to buy and add to long positions, and the expectation of higher highs yet to come this year.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.