Key Takeaway
The S&P 500 has pulled back from its overbought highs, and is trying to find a floor to its recent pullback. So far it may be close, but no cigar - quite yet. We're watching the levels and will begin to put cash, which is on the sidelines, back in when we begin to see some positive and apparent sustainable momentum. As previously mentioned, the market is in a very seasonally tough part of the year, so we anticipate the daily swings to be a bit more pronounced than usual. With Nvidia announcing a blow out earnings report (and future earnings guidance) last night, considering today's pullback, it seems as if it was a "buy the rumor, sell the news" situation (so far anyway). I think this pull down can serve as an opportunity to hand pick some ideas to begin putting the cash back to work, and we are actively looking for opportunities.
In the chart below, to feel confident, we'd want to see RSI above 50 (top section), price to rise back above its 20 & 50 Day Moving Averages (middle section), and MACD to cross-up as well as get back above a zero reading (lower section). Not to say that we won't begin to average into some good positions in advance of achieving these optimal conditions, but would doubt that we'd be fully back in without them.
In the chart below, to feel confident, we'd want to see RSI above 50 (top section), price to rise back above its 20 & 50 Day Moving Averages (middle section), and MACD to cross-up as well as get back above a zero reading (lower section). Not to say that we won't begin to average into some good positions in advance of achieving these optimal conditions, but would doubt that we'd be fully back in without them.
