S&P 500 Index Trend Following update

After the close on Friday June 12th. In this update post we are changing over from the 200 day ma, to look at the 40 Week moving average of at least a  20% annualized rate of growth.  The reason is the 40 Week filters out some of the daily noise. It is more simple.

For the newbie readers out there, this means that the item is moving along a 40 Week moving average of a 20%, or greater,  annualized growth.

And also for the new readers, this is pure, long term momentum trend following. This is not about fundamentals, personal opinions, forecasts, and projections. Investment Buy and Sell decisions are based on price action only.

The S&P 500 Index broke above the 40 Week, 20% growth rate, on the week of July 5th. There are several other Indexes that crossed over earlier, for example Aerospace and Defense,  Real Estate, Utilities, Home Builders, Gold, Gold Miners.

Stock chart of the S&P 500 Index with the 40W MA 20% growth  in the lower panel.

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S&P 500 Index end of week

the rally is stalled

Trend following The S&P 500 Index (SPX), end of week after the close, closed down on the Week and Up on the Month. (lookbacks). The Index remains in a long term Upward trend. It is trading at or above a 10% annualized rate of growth over a 200 day ma.

We can see on the stock chart below, the The Index has been struggling with S/R (Support and Resistance Price Reversals) at $2,950. The rally momentum has stopped.  So this is not a Weekly buy signal. On a Monthly basis, and on a long term Uptrend, sure why not?

S&P 500 Index stock chart, Weekly:

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Trend following update on the S&P 500 Index

Today the S&P 500 Index has re-established a long term Upward trend. It has crossed above a trend momentum measure of, at or above, a 10% annualized rate of growth over a 200 day ma. Additionally today, it is trading above last weeks high.

Which do you like? The 10 year US Treasury Note today is yielding 2.13%, and many around the world are 0%.

So we’ll see how the day and the week close.

Trend following uses price action, and ignores news, tweets, FaceBook, hot tips, stock and economics “fundamentals”, and bubblevision (television).

S&P 500 Index trend following update

the index is trying to rally

To begin to re-establish a long term Upward trend, we want to see it overcome the S/R (Support and resistance price level) of the High of last week – $2,841. This will help to show us that The Fed tweet is more than a short covering rally. Currently the Index is trading below a 10% annualized rate of growth over a 200 day ma.

Stock chart of the S&P 500 index

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S&P 500 Index–trend following update

continuing the downward trend

As noted in a previous post, the $2,800 area is a major S/R (Support and resistance price reversal level). Today, intraday, looking at the weekly lookbacks, the Index has ‘elected’ this bearish reversal.

S&P 500 Index stock chart

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The long term Bullish Trend stopped on May 8th. The price dropped under the 200 day ma of 10% annualized growth rate.