Time to Buy ………Carefully

By Gene On February 21, 2010 · Leave a Comment

It appears that we are going to make another move up. All of the sectors have turned bright green except one. Another interesting happening was the fact that we went directly to bright green (buy signal) from bright red (sell signal). This did not give us the warning of a change that we normally get with a normal dark red (trading range or consolidation) before the bright green. We had a strong move up this week, but we are still short of the recent highs (1150 on the S&P) on low volume. We could be looking at a double top of the recent high, or with a short retracement from here, we could take out the highs. But the head fake (not following through with this move) is certainly a possibility. Remember we react to the market we do not prejudge it. All that I have said above is observation not predicting the market. We take the trades and always realize that we do not win on every trade. However, for the last two years we have been right on target.

The WizardPicks did not get filled on any of the sell picks for last week. This is usually a sign that we are going to make another move up. But with the lower volume it still makes me think we might be in a trading range that needs to break out one way or the other.

So what do we do now? On the long term we are not filled on any signal, long or short with the exception of the Russel ETF (IWN). We have been in the Russell trade for six and a half months. We still have the sell signal on the S&P and buy signals on the Dow and Nasdaq. If I take signal here, it is going to be daily signals, conservative, and taking every profit target. When I get to the first target (133.35 on SPY), I am going to take the profits off and move my stop to where I entered the trade. We did that with the entries that we shorted on the indices and the results are in the second slide.

Weekly Indices