My breadth indicator has turned yellow. This means nothing in itself, just to keep the status quo but be aware that conditions might be improving. Yes I’m aware that the indicator has been red during an upsurge of the market, so “improving” might seem nonsensical. This indicator is a little conservative. I use it to time entries into individual stocks, rather than just trading SPY outright.
Back in June of 2016, I wrote this post about random entries and trailing exits. It turns out (on average) that you can beat buy-and-hold of the S&P 500 by simply buying members of the S&P 100 randomly, as long as you a) have a market-timing filter, and 2) have a trailing stop of 20%. Yes that’s right, just pick them at random! Here are the details of that original ‘system’ (it’s not really a system, more of a curiosity): Continue reading All About the Exits…Revisited
Indicator turned red.
On Thursday, the indicator dipped briefly below the 75 threshold (74.82 to be exact). It is now above 75 again. The indicator is only “green” when the last ten days have been above the threshold. So it is officially yellow for now.
What should you do? Panic? Sell everything and buy gold and/or bitcoin? Er…no. Just wait to see where it goes.