Timing this Market
November 1, 2017
First things first. The market ( SPY etf ) closed October 31, 2017 at $257.15.
This is 6.29% above SPY’s 200 day moving average which is $241.93.
This means, sail on . The skies are clear and our 200-day model barometer is not signaling a change in the weather…yet.
I have read that the stock market spends much more time in an uptrend than in a downtrend. Bull markets have an average duration of 97 months while Bear markets average 18 months. That doesn’t mean Bear markets aren’t violent. It took SPY a long time to come back from the 56% knockdown of the last Bear market.
The current Buy Signal for SPY is 401 days old. This was preceded by a sell signal which lasted three months and before that a buy signal which lasted 931 days. So, those who have followed the model have enjoyed almost all its profitability and would have avoided a serious downdraft had the sell signal been more than a head fake..
Today starts the beginning of my investment year. I am always mindful of “Play until May then Go Away”.
So, with the SPY model positive and Obama’s low-interest rates, I feel very good about everything except the possibility of the market failing to meet Wall Street’s expectations for a tax cut and higher earnings due to developments in Washington DC.
Richard Maurice Gore.