As of Wednesday, December 7, 2016 at the close of trading EquitySurge™ has generated a strong sell signal for USA equities.
Stocks had a massive rally today that came out of the blue and was accompanied by weak volume. The S&P500 Index closed at a new record high of 2241, up almost 30 points.
Today’s action looks like a textbook blow off top, especially considering that liquidity, which rose somewhat today, is still firmly warning us about being long stocks.
Do not get greedy with these prices; liquidity is telling us that something is wrong with this rally, and history confirms that it is always best to heed what liquidity is telling us.
This blow off top could continue higher as we are also in the midst of the Holidays, a time when the market frequently drifts higher. However make no mistake, with what liquidity is telling us, prices could reverse lower just as quickly and significantly as they have risen since the election.
We will continue selling into this price action and keep building up cash. Remember, the object of investing is to buy low and sell high…
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.