The model score rose today to 33. This means that the market is not making much progress under the surface but is not deteriorating either, even though it closed slightly lower. The market is digesting its losses. This is ultimately bearish. The moving averages are still moving apart negatively. It is unlikely they will cross over before the counter-trend signals are negated.
I want to remind you that our positioning longs in SPY are now trading longs and will be sold should the market close over 3% lower than the “purchase price”, 5% higher, or, in any case, after 15 days of purchase if neither condition has been met. We will, at some stage within the next 15 days be in a “risk off” position, most likely.
Owners of AZO, GPC, A, EXPE, HD, ICE, SHW, AAP, JWN, OKE, ORLY & APA should examine whether it is worth holding these stocks as the position is rapidly deteriorating in those names.
Our asset allocation is still unchanged from yesterday.