Sunday Update: 100% G Fund Until Further Notice.

Happy Father’s Day!  I hope everyone is enjoying great weekend.

It was another relatively lazy summer week for the market.  Volume was below average, but up a bit over last week.  The C fund was lower for the week but is consolidating at/around the 50DMA.  This is a similar set up to May (See the chart below).  We’ll see if the 50DMA acts as support and the market moves higher like May or, breaks down to test the 200DMA.

20160617CFund6mosDaily

Long Term

We have been looking at 2 year weekly charts to get a longer perspective of the market.  Below is an even longer view with the 5 year weekly.  From the beginning of 2012 thru mid-2015 the S&P500 bounced along the 50WMA.  In mid-2015 we saw a bid down week that closed well below the 50WMA.  This was the first technical chart indication of a potential change in the long term pattern.  That pattern has played out over the past year to create a clear expanding triangle.  If the trend stays in place, we can expect to test the 1800 level or below by later this year.

20160617Cfund5yrWeekly

 

20160617Cfund2yrWeekly

The 2100-2150 level is some serious resistance!  The market will need to break thru this level to start the next serious bull market.  Under current conditions, the odds don’t favor it.  We have just rolled off the top of the pattern on a 5 year chart.  We are likely to see this long term pattern continue and prices to decline from here.

Unless the weekly pattern changes, I will be 100% G fund for the foreseeable future…

– Jerry