Technically Speaking: Rothschild’s Investing Rule

Since the markets were closed yesterday for “Memorial Day,” there isn’t much for us to update technically from this past weekend’s missive.

However, I did provide an update yesterday for our RIAPRO subscribers with respect to where the S&P 500 is currently trading and why we expect a short-term bounce. To wit:

  • As noted previously, SPY tested, and failed, at the bottom of the uptrend line from both the 2017 post-election bounce and the 2016 lows.
  • SPY has now corrected the overbought condition and is testing support from the January highs with the 200-dma close below.
  • The “buy” signal in the lower panel was also massively extended, as noted several weeks ago, suggesting the reversal we have seen was coming as we warned then.
  • The correction last week has set up a tradeable opportunity into the end of the month.
  • Short-Term Positioning: Bullish
    • Last Week: Take profits and hold.
    • This Week: Add 1/2 position to portfolios with a target of $290
    • Stop-loss remains at $275
  • Long-Term Positioning: Neutral