As of Friday, January 20, 2017 at the close of trading EquitySurge™ has continued a strong sell signal for USA equities.
Stocks finished higher on Inauguration Day, with the S&P500 Index closing up around 8 points at the 2271 level.
However the stock market is still just consolidating below the 161.8% Fibonacci retracement level from the Summer high to the election night low on the S&P500 Index Futures, which resides at the 2273 level. This consolidation has been going on now since December 13, 2016. See the chart below for details:
Liquidity continues to warn about remaining long equities, and itself keeps dropping, a very concerning sign.
As we’ve mentioned several times before over the past month since we said to sell into this sideways consolidation, it’s very unclear right now whether the impending decline in stocks will be a much better buying opportunity (i.e., lower prices) in a continuing bull market, or the beginning of a larger correction or even bear market.
So for right now liquidity, our best indicator of future stock price direction, is strongly telling us to sell equities and build a cash position in front of an imminent decline in stocks.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.