Today I answer questions on market tops, support levels and downside plays-non-leveraged.
Although the SPX continues to show strength, many indicators are beginning to look overbought.
Q. Is the market topping?
A. To help answer, let’s study the SPX, Rip-Van-Winkle for clues.
1. Current Elder Impulse System price switched from green to blue
2. Price continues to trade well above the 14 SMA
3. CMF remains very positive
4. RSI is positive
5. MACD Histogram is overbought
Q. Where is the next level of support from these levels?
1. A pullback to the previous support around 2100 would be a little over 15%
2. A. pullback to the 2016 a810 support level would be a hefty 32% pullback.
Q. Any ideas on a safe pullback play?
A. While many are looking at leveraged inverse (bear) funds, they are extremely risky. A safer play is TLT.
Enjoy your weekend!
David O. England
Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2
This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.
DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.
If you have a question or comment, contact David England at firstname.lastname@example.org