Strategic Stock Trade
SST Email For 2/1/2019:
Stocks finished the month of January substantially higher, with the S&P 500 index up nearly 8% after being down 9% in December.
The SST NH / NL Index, for the 1st time since October, shows 3 of the 4 look-back windows that we track in bullish territory. Only the Weekly time frame remains bearish.
What does this all mean?
It simply means that the market is now overbought on the weekly time frame, which is where we make our strategic trading decisions. The weekly stock indexes are now overbought as we move into the month of February.
Looking at the SST NH / NL Index charts; the monthly closed with a 1,290, Quarterly = 434, Yearly = 102, and Weekly = 283.
On a year-over-year time frame, the monthly NH / NL Index is showing a negative divergence. The month of January 2018, the S&P 500 price index was higher versus 2019. However, there are more monthly NH / NL today than in January 2018.
Thus, we have our negative divergence. Lower price today with more NH / NL versus higher price January 2018 with less NH / NL.
All in all, I still expect a retest of the December 2018 lows once the algo machines decides its time to jump.
I am short AAPL, NVDA, and long UVXY today.
The SST Daily Index Numbers Closed Trading As Follows:
NAZ = 78.05
DJIA = 89.84
IWM = 83.59
S&P = 85.09