Last week’s call worked out, again! The market closed higher while we got a mild pull back of almost 1%, as written last week.
Setup for week 10 is neutral to slightly bearish, hence I expect a lower close. This call remains valid until Thursday. Friday’s non-farm payroll numbers can be game changing.
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- Direction: long term up, intermediate-term up
- Volatility: very low, ranked long-term volatility bellow intermediate term volatility
- Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions have weakened.
- Channel: intermediate channel position very low.
- OB/OS: RSI(5)>50 and <75, RSI(10)>50 and <75
Seasonality is bullish for March (K). First week of March is neutral (L).
Correlation (M) among S&P500 members remains VERY low (<0.1) and continued to weaken.
Read more about my correlation related research here.
Market Breadth (N) is at high absolute levels and continued to go-up, indicator value is at highest quartile. In the past this has been a highly negative setup.
No particular conclusion can be drawn from sector setup (O).
RISK ON for the bond market (P). Generally this is positive for the stock market, especially with a combined setup of DIRECTION & VOLATILITY.