What do we know for sure about New All-time Highs?
We know for a fact that they are NOT a characteristic of a downtrend. We've gone back and done the work, and as it turns out, New All-time Highs are normally things we see in uptrends!
With the S&P500 going out at New All-time Highs yesterday, and the Nasdaq making it now 3 months in a row of all-time highs, is the bet you want to make that we're in a downtrend for stocks?
This 10-month moving average strategy is one of the more simple, yet effective trend following systems that I know of. If the S&P500 closes the month above its 10-month moving average, we want to be long. If the S&P500 closes below its 10-month moving average, we do not.
For us, there's a lot more that goes on behind the scenes. We were not waiting for this to occur before buying stocks. There were plenty of names to buy in back in March. But looking at this chart above, the trend here is clearly not down.
We want to take all the evidence and ask ourselves: Is this an environment where we want to spend our time looking for stocks to buy? Or should we be spending our time looking for stocks to sell? The way we see it, the former is still our priority.
This Tuesday night August 4th I will be hosting our Monthly Candlestick Strategy Session (Premium) Live at 6PM ET.
*NOTE: If you cannot make the live call, a recording will be made available by Wednesday morning for all Members.
Looking forward to it! See you there!
Cheers,
JC
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