Tuesday, August 29, 2017

As of Tuesday, August 29, 2017 at the close of trading EquitySurge™ has continued a strong sell signal for USA equities.

Stocks gapped down this morning at the open but then spent the entire day moving higher during the cash session, retracing all of the 15-20 point overnight drop in the S&P500 Index.

This is the third time this month that the S&P500 Index has had a steep decline followed by a retrace back up. Talk about a market jogging in place waiting for something!

However as the S&P500 Index gyrates, other telling market indexes are doing rather important things. Today is the first time since July, 2016 that the German DAX Index has closed below its 200 day moving average, a strong sign of relative weakness in that index as compared to the S&P500 Index. The Japanese Tokyo Nikkei Index is also down at its 200 day moving average, the first time since the US elections.

Also long US Treasury bonds as represented by the ETF, TLT, closed higher today and back up to price levels we haven’t seen since before the election – see chart below.

US Mid-cap stocks continue to consolidate under their 200 day moving average, another strong warning about the overall health of equities in the USA.

The US Dollar Index has now also closed back down at levels it hasn’t been to since May, 2016.

Here are several charts to consider:

US long term Treasury bonds via TLT – a priced based ETF. Higher values on this ETF represent higher US Treasury Bond prices and correspondingly lower yields.

TLT 08292017

German DAX Index.

German DAX 08292017

Tokyo Nikkei Index.

Tokyo Nikkei 08292017

US Mid-cap stocks via MIDU.

Mid Caps MIDU 08292017

US Dollar Index.

US Dollar 08292017

And of course, one of our favorite long term directional signals for the US stock market, the Sotheby’s (BID) to S&P500 Index (via SPY) ratio chart.

BID-SPY with Elder Impulse 08292017

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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