Thursday, March 30, 2017

As of Thursday, March 30, 2017 at the close of trading EquitySurge™ has continued a strong sell signal for USA equities.

Last week we posted a chart showing two likely scenarios for this week and beyond. The more likely of the two was that the stock market would turn higher and aim for the 2400-2430 level on the S&P500 Index Futures to complete the blow-off top move higher in prices since the State of the Union address by President Trump. The second scenario involved an immediate decline towards the 161.8% Fibonacci Extension from the Summer high to the election night low.

It looks like the more likely first scenario is now playing out, as this week stocks have staged a nice rally higher.

The chart from last week is posted first below, and the second chart has been updated to today’s close.

ES Screenshot 03242017

ES Screenshot 03302017

If you are still long stocks you should strongly consider targeting the price region from here to 2400-2430 to liquidate your long positions because if this scenario plays out the market will most likely be in a very vulnerable position once it reaches the price target area from 2400-2430, especially if as we expect, this price region is hit on negatively diverging technicals as compared to the first time the market hit the 2400 level a few weeks ago.

If you have already excited long positions during the rally since the election and are now in mostly cash, be patient as a steep, scary decline is coming after this price target zone is reached on negative divergence, afterwhich a much better (lower prices) entry point for new long positions will present itself.

If you would like to review the EquitySurge™ trading signals generated in 2016 and so far in 2017 please see the Trading Signal Performance Chart page.

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