The Dow Jones 30 stocks represented by the Exchange Traded Fund DIA fired off a buy signal last week. On the basis of the buy signal the answer is yes, it is time to buy; but I would prefer to wait for a pullback. I think it is inevitable, given the fast rise we have seen in the stock market in the last two weeks. I see that DIA is now hovering right at its 200 day exp moving average. That is looked upon as a resistance line and I am thinking that DIA will pullback, gather some strength and then climb again. Still, it is a lot easier not to second guess these signals and just follow them.
My 401K funds analysis is due next month, so I do not intend to jump in and violate my 401K fund management rules. If we keep up the momentum, then my 401 K monthly analysis will also pick up the up signal and tell me to get back in to rising equity funds. I can wait.
I am regretful that I missed picking up the buy signal that was on SNDK a while back. I saw it but did not act upon the information. Why? Because I am still somewhat plagued by a hesitation to enter stocks when the market majors still have a down signal. That is the super conservative nature I have. Yet it is logical that before the major ETFs perk up, we will see faster action from technology areas like SNDK.
I took a quick look at CREE and it still has a down signal although it has recovered from 24 to 29. It may be another stock to watch, although the long downward plunge since January is foreboding.
The 50 day ema (red line) on DIA is below the 200 day ema (black line). It will take sometime before this becomes another major up move which has to have the 50 day ema above the 200 day ema. If it wants to do its slow gyrations and collapse and take us to deeper depths, as the gloom and doom scenarios suggest, then we will get a down signal in due time and that might be quite a good spot to take on some put positions on DIA and make a little money on the down side…
For now, there is an Up signal and I will look for a dip to try to put on some long positions.
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