Fear of a Fall 3/14/14

We have had a nice run up over the last 5 years. For those who were able to get out early 2008 and then get back in March-April 2009, it was a bonanza. Now we worry if the Market will drop and take our profits away. So where does this leave us?

My current system on the Dow Jones 30 is reflected in the chart DIA which is an ETF comprising of all 30 Dow Jones stocks in the proportion to exactly copy the DJ30 index. It is a more active signal than my system on SPY, the S&P500 ETF, so it gives me more whipsaws but also earlier warnings. It flagged a down signal last week on 3/13. See chart below.

The chart on SPY remains undisturbed and still signals up. I would be concerned when SPY drops below 182 and the blue support line on the chart. The uncertainty in the Ukraine/Crimea and Russian region does give us cause for concern but the US economy is positive and still growing with low interest rates. Deficits are reducing and unemployment is steady and slowly dropping, although part of it is the baby boomer generation retiring in growing numbers every year. This will make unemployment look better than it actually is. Still, the stock market growth reflects the improvement in the economy following the end of the great recession.

I notice that GLD has been steadily climbing since my signal on 1/13/14 and my post “State of the Markets 1/18/14”.  I have gone in and out and made some money on NUGT and waiting for another buy signal. GLD remains the safe haven while even the USDollar keeps falling.. you would think the USDollar would strengthen as the US stopped printing money and looked at slowly raising interest rates…goes to show it is best to follow the charts – the collective wisdom of the market, far more powerful than all individuals high powered as they may be.