⇑⇑ Strong Buy
As of Friday, May 10, 2019 EquitySurge™ has generated a STRONG BUY signal for stocks.
Since our last post on March 19, 2019 we’ve been expecting the stock market to correct.
The market did drop in the days that followed our post, but instead of the deeper correction we thought would happen back then, the market instead reversed higher and made a huge gap up from the close on March 29th to the open on April 1st and continued higher in a rising wedge formation since then, which finally broke on Tuesday of this week, allowing the correction we’ve been expecting for a month and a half to finally happen!
Hopefully you were able to use the rising wedge formation of the past month and a half as an opportunity to sell into.
This week’s correction was quick, sharp and caused a lot of fear and trepidation in the markets, just what the doctor ordered! The headlines were all about President Trump’s Tweet on Sunday night declaring that the Chinese negotiators had allegedly reneged on various trade deal points already agreed upon and therefore the President was going to add massive new tariffs on Chinese goods.
After a quick retrace higher on Monday from the Sunday night futures plunge following said Tweets, the markets dove into correction mode beginning on Tuesday morning and didn’t let up until the double-bottom set about mid-day today, after which during the rest of the afternoon and right into the close, the stock market soared higher back to near the 2900 level on the SP500 Index.
And the lows of this correction took out the 2840 level on the SP500 Index to close the open gap, which will now allow the market to revisit the all-time-highs (made on the Futures during after hours last week) and well beyond.
The stock market does not like open gaps to remain on the chart for very long, so President Trump’s Tweets about more tariffs against the Chinese were perfectly timed to correspond to the market having made slightly higher all-time-highs just last week. That massive gap from March 29 to April 1 needed to be filled before the market could continue meaningfully higher, and now it has.
Today’s (Friday’s) action also created a huge Bullish Engulfing Daily Candle, the likes of which we haven’t seen since just after the December-January lows! This bodes extremely well for the resumption of the massive Bull Market Rally we’ve been experiencing this year.
Liquidity indicators which had been flashing warnings since mid-March are now turning bullish again, another very positive sign!
We would therefore be strong buyers of stocks from here and especially on any pull-backs that occur over the coming days.
RRG® Graph Commentary:
The indicators in the DAILY RRG® graph are now soaring higher from the Improving quadrant towards the Leading quadrant. This is telling us to start accumulating long stock positions. The WEEKLY RRG® graph has the indicators rising from the Lagging quadrant, but not yet pointing straight up towards the Improving quadrant, which means there could be more price volatility in the coming days and weeks. However as long as the Daily indicators keep moving towards and into the Leading quadrant, dips in stock prices should be seen as opportunities to buy.
Current DAILY RRG Graph:
Current WEEKLY RRG Graph:
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