As of Friday, March 1, 2019 EquitySurge™ has generated a HOLD signal for stocks.
After a brief and shallow pull-back in early February, the SP500 Index then continued climbing higher for the rest of the month, reaching back up to the levels of last October. Now after 10 straight weeks of an almost vertical rise in stocks and a V-Bottom off the December, 2018 lows, we are seeing evidence of a coming pull-back or at least a substantive consolidation.
While we do not think a major sell-off is coming, we do think that there will be a pull-back in price which will allow longs to add to positions at more attractive, lower prices. We could see a retrace back to the area of the 200 day moving average on the SP500 Index, which is around the 2750 level or slightly lower.
There is still massive bullish liquidity, so the pull-back should be brief and shallow. We would be buyers to add to existing long positions around the 2750 level or better on the SP500 Index.
RRG® Graph Commentary:
The indicators in the DAILY RRG® graph are spinning between the Lagging and Improving quadrants. This is evidence that stocks are slowing their climb higher now, if not getting ready to falter somewhat. The WEEKLY RRG® graph has the indicators plunging down into the Weakening quadrant, which should then lead them into the Lagging quadrant before they start climbing higher again into the Improving quadrant. This is all evidence to us that some kind of pull-back or consolidation period is upon us for stock prices.
Current DAILY RRG Graph:
Current WEEKLY RRG Graph:
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