As of Tuesday, December 27, 2016 at the close of trading EquitySurge™ has continued a strong sell signal for USA equities.
Stocks edged up today on low holiday volume.
What to watch for this week and into early next week: Since 1950 this 7 day or so “Santa Claus” rally period has returned on average a 1.4% gain. Years where the gain during the period was significantly less or negative tended to precede bear markets or signalled that stocks could be purchased later in the coming year at much lower prices.
With liquidity warning us to get out of long equity positions right here right now, we won’t be surprised to see a flat to negative “Santa Claus” rally period. However even if stocks are able to return 1.4% or more over the next several days, that does not change the message from liquidity to take profits and get to cash.
2016 has turned out to be a great year to own stocks, especially if you got long early on using the EquitySurge buy signals generated in January and February. But even if you didn’t get long until recently you’ve still had a nice return. However, now our stalwart signal, liquidity, is telling us to reap the profits of being long stocks this year and move to cash…
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.