CEO

Short-term investor sentiment is now excessively optimistic which is short-term bearish for stocks.  The S&P 500 index sits today at 2090.  The next important resistance sits at 2100.  There is significant resistance at the prior high near 2133.

Having broken above important technical resistance (dotted red line in chart that follows) a pull-back test of that breakout makes sense.  Look for a correction to the 2040 area.

I continue to favor a 30% weighting in equities (hedged).  The market remains over-valued.  My favorite “weight of evidence” indicator, the CMG-NDR Large Cap Mo Index, is improving but remains in a sell.  It moved to a sell signal on June 30, 2015.  The S&P 500 Index closed that day at 2063.

A move above 2133 will signal a stronger environment for stocks.  The hope of QE (Europe, Japan, U.S.) is once again driving the risk-on play.  This is unusual and unprecedented central bank activity.  Continue to own equities but hedged.

See full story Trade Signals – At Tactical Resistance, ST Sentiment is Neutral

The current opinions and forecasts expressed herein are solely those of Steve Blumenthal and are subject to change.  They do not represent the opinions of CMG.  CMGs trading strategies are quantitative and may hold a position that at any given time does not reflect Steve’s forecasts.  Steve’s opinions and forecasts may not actually come to pass. Information on this site should not be used as a recommendation to buy or sell any investment product or strategy.

–  Steve Blumenthal  | See  Important Disclosures