Still mostly in cash..

I have been mostly in cash still. The markets are showing signs that they are ready to pull back and it’s prudent for me to wait for the markets to present an opportunity to buy rather than jump in right now. I am not confident to short the markets either. So playing the wait and watch game on the sidelines right now.

 

Here’s the 6 month chart of the S&P500 index.

 

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You can see a bit of weakness showing up right at the top. We had a week of distribution and the MACD is turning bearish as well. We formed a double top and had an attempt to break out but since then the breakout has failed and we are back in the zone. If it breaks the minor up tread line it might be ready for a short position.

 

Here’s a little longer term view using the ETF SPY.

 

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You can see that we are churning around the 75% retracement level – which is where the failed breakout occurred. 

 

And have a look at the long terms treasury bonds aka TLT

 

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It has made at least 4 bottoms in the last 3 years at the almost the same level. All this at least warrants a minor pull back on stocks. Let’s wait and see how it pans out.