SPY Sell Signal

September 1, 2015

After 921 days, for this trade…..it’s time has come.

SPY  generated a month end SELL signal at yesterday’s close, telling me to get out of the water…..pronto !

This trade was opened as a BUY on December 31, 2011 and has returned 69.02% since then including dividends and distributions according to “ETFreplay” ,  my back testing provider.  That amounts to an average gain of 1.57% per month, or an average of 18.84% per annum.

Not bad pay for watching grass grow and paint dry !

The trade before this, September 30, 2010 ( Buy ) to August 31, 2011 ( Sell ) 232 days returned 8.65%.  Money then spent four months on the sidelines before the December 31, 2011 buy signal was generated.  I will not enter the water again until SPY ends a month with its price above its 2oo day moving price average…..a Buy signal.

Stepping away from this model…..SPY is closing in on a ” death  cross “….the 50 day moving average of it’s price crossing below the 200 day moving average….AND..for those who can remember what the October  market is capable of, October is not far over the horizon….and an interest rate increase could also be bad for stocks….And, all this leaves out the Chinese Dragon / Swan….. ( red body / black tail/ long teeth  ).

On the other hand, interest rates are low and probably will stay low until the Fed sticks it’s foot in the Dragon/ Swan’s s mouth.

Interesting choices for me…..do nothing and pray my  stomach is strong enough to withstand a plus 50% drop until SPY turns and  comes back. Take half off the table and pray this is only a head fake  Or, do what I am doing ….beaching this sucker !

I’ll spend my time on the beach ( at least until the September 30 close) , researching fixed income alternatives which beat money market rates.

I’ll be in touch.

Richard Maurice Gore

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