As of Wednesday, October 26, 2016 at the close of trading EquitySurge™ has continued a strong buy signal for USA equities.
This update for Wednesday is being written on Thursday morning, but it doesn’t really matter as the stock market remains bound in a noisy trading range from which it has been unable break out one way or the other since mid-summer.
This condition is probably going to continue until after the election and the Federal Reserve meeting in November, and perhaps longer, but the good news is that we do have a reliable signal telling us to remain long the stock market and in fact keep using sell-offs and price dips to buy. This reliable signal is liquidity, the measure of money flowing into or out of the stock market. Liquidity has been extremely strong all year and this bodes very well for a strong end-of-year rally in the stock market.
So for now the market is gripped by election-related uncertainty, a Fed meeting in early November and gyrations in global bond yields as investors prepare for a likely Fed rate increase between now and the end of the year. But the message from liquidity is steadfast in telling us to keep buying stocks on weakness in anticipation of a significant “catch-up” rally higher in stocks at some point in the near future.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.