• Since 1995, the crossover of the 12-month EMA and the 20-month EMA have been reliable indicators of trend; while not perfect timing indicator for tops and bottoms, following this simple metric would keep investors on the right side of the trend.   Of course, there is no way to know whether this will hold true in the current cycle.
• The S&P 500 has only traded below

 “Well, I never heard it before, but it sounds uncommon nonsense.”

- Alice in Wonderland

• The S&P 500 has been submerged with a fairly negative trend setup since the August selloff, experiencing the death cross of the 50-day below its 200-day and trading below the important longer-term 12-month and 20-month EMAs.
• Recent price action had the appearance of a bottom, but the S&P 500 became mired in a volatile sideways trading range since August 21rst, fail

Volatility Returns to the Markets – Third Quarter in Perspective

Volatility returned to the US equity markets in third quarter, with the S&P 500 dropping -6.9% and bringing the index to a -6.7% loss year-to-date.    From the May 21, 2015 high to the August 25, 2015 low, the S&P 500 dropped -12.3%.

Piper Jaffray Sr. Technical Analyst, Craig Johnson, compares today's markets to the 1950's in their recent Informed Investor report:

History does not always repeat but it does seem to rhyme with the early 1950s 

As most of you know, we are big fans of Dorsey, Wright & Associates.  They had a an interesting article today regarding the valuation level of the market that we thought you all would find interesting.  

Relative Strength measures how one security is doing compared to another, how one asset class compares to another or even how one market compares to another.   Relative Strength analysis  has  proven to be a one of the most reliable tools we use to find the strongest sectors in the market and the best performing securities within those sectors.

The stock market has taken us on a big roller coaster ride so far in 2014.  After hitting all time highs on January 15th, the market nose-dived through the end of the month.  This turbulence caused some of our indicators, like Bullish Percent charts, to move to a defensive posture so we sold stocks in some of our portfolios to reduce exposure.  

Point And Figure Charting Basics

By Investopedia Staff on February 21, 2011 

Designed for long-term investment, point and figure (P&F) charts have been described as one of the simplest systems for better determining solid entry and exit points in stock market trading.

“As January Goes…”

The January Barometer phenomenon was first discussed in 1972 by Yale Hirsch, founder of the Stock Trader’s Almanac. It simply states “that as the S&P 500 goes in January, so goes the year.”