My Favorite Chart For Tracking The S&P 500
Tonight we are updating our look at the S&P 500 via our favorite chart of SPY. We last updated this chart in Superstock Investor on November 7th. We thought it was time to share the chart outside of that website.
The first thing we notice is that the weekly Displaced Moving Average (DMA) Channel still sees the price below the channel which means that the bias is still negative.
Second, the Erlanger Volume Swing (EVS) is at -27.02 from -16.02 on November 7th. Above 0 is good and below 0 is bad. So currently, it is below zero trying to bottom from lower levels.
Third, the Erlanger Crossover Spread (EC) Spread is at -3.64 from-38.35 on November 7th. So there is some improvement here.
Last, the Erlanger Trend Direction (ETD) remains in rally from downtrend as it is still green in the lower half.
So what is an investor to do here? We would recommend to stay with strong stocks and begin to nibble on weaker stocks in rally mode on the ETD. Several indicators remain weak which is why we adjusted how we add to positions.
Begin to build a shopping list of new ideas to buy in addition to nibbling. Stocks are getting cheaper by the day as only 31% of stocks are higher for the year.