As of Wednesday, April 19, 2017 at the close of trading EquitySurge™ has continued a strong sell signal for USA equities.
We are not yet seeing the retrace higher in stocks, but we still believe that a trip back up to the 2400-2430 level on the S&P500 Index is coming.
There is some evidence that small caps are beginning to outperform their large cap brethren and that is bullish for overall higher stock prices.
We are also seeing evidence that the US dollar versus Japanese yen currency cross is bottoming, which if true would show that the global capital carry trade pump is turning on again, which is also bullish for higher US stock prices.
Liquidity is telling us that the overall backdrop for US stocks is marginally bullish, but that a rally higher is likely to run out of steam and lead to the double top formation we are expecting around the 2400 level.
And again while there are now 80-100 points to get the S&P500 Index Futures back to the 2400-2430 level, and that long trade sounds exciting, it is still a risky proposition given the liquidity backdrop being only marginally supportive of higher stock prices, and our belief that prices will meet major resistance up near the 2400 level. Aggressive traders could take this long trade, but if so it should be closely monitored.
The better course is to continue selling into the retrace higher if you still have any long equity positions, and keep building a large cash position.
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.