Current position for Active portion of portfolio: SELL – S.T.A.Y. Plus™
Upside trend break may not hold…..Downtrend continues.
Last week the market had another down week, losing some more of its recent gains. It’s looking more and more probable that an intermediate top was put in on Feb 2nd, only time will tell. The market has opened substantially down over 1% today so the market is still displaying a heaviness toward the downside. However, it is still maintaining above the long-term downtrend line to the upside. The question remains, will this be a successful breakout that leads to a continued uptrend or a failed breakout that leads to the continuation of the long-established downtrend? Only time will tell if it is able to hold above this 12-month long downtrend line. The rules in drawing a trendline is that it has to start with the high point and connect to at least one additional lower high. If it works that a downtrend is supported by more than one lower high it just makes it a more established downtrend line. Take special note of the Market Quiz which deals with an example of a downtrend line that was penetrated through to the upside. We will keep an eye on this situation and keep you posted.