Christopher Carolan, Editor On Time Update 12 April 2005 10:15 AM
A BEGINNING
The weekly trend for the S&P 500 is down. Any weakness in the daily trend is, therefore, a sell signal. A down day in the S&P 500 today will move our daily trend from up to neutral. Additionally, the S&P this morning has penetrated its net-line sell level, which if it closes here, will downgrade the trend further to a sell. Finally, the PutCall Directional Index issued a surprising divergent sell last night. With some market participants (including me recently) looking for a test of the lows, the market may surprise us by beginning a larger new down leg here. Move to short the S&P 500 basis the June futures at the market and use a 10 point stop.
I expect bonds, euro, gold and silver declines along with the stock market weakness here, but the S&P position looks to be the better trade from a risk/reward stance.
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