As of Friday, August 12, 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.
The stock market reacted to the tepid retail sales report Friday morning with more consolidation up near the recent all-time-high prices, and closed near the 2184 level on the S&P500 Index.
This consolidation period could continue for some time longer, as the market does not seem to want to go down, but rather is trending sideways with occasional new marginal high prices being achieved.
While frustrating for investors and traders, long consolidation periods after torrid moves higher in price serve to “legitimize” those moves higher and prepare the market to move higher again.
Liquidity indicators are still strongly bullish for higher stock prices, and continue climbing higher themselves as well, which predicts higher stock prices in the making.
We are still of the opinion not to chase stock prices higher here, but rather just continue holding existing long equity positions as we gather more information about the market’s next intentions, which could be the beginning of another leg higher in prices, or a short but sharp correction lower, which most likely will be another excellent buying opportunity. Sorry for the ambiguity, but quite frankly the stock market is just a hold right here right now until we see more information.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.