Markets Shift into Neutral

Stan Harley |

Neutral Outlook Issued

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I don’t normally issue advisory changes this often, but the choppy pattern as we draw nearer and nearer to the final high has made this necessary. I’ve been anticipating the potential for a stock market high in the present time frame – essentially forming the bravo crest in an alpha-bravo subcycle pattern off the February 2, 2015 low.
My assessment of both the daily and hourly patterns are giving mixed signals for me. I can make the case for a high right in here – the 36 trading day pattern and associated regression analysis would certainly suggest that the high I’ve been expecting occurred yesterday. In my price velocity plot below, my seven and 14 day components are rising; my 27 day component has ticked slightly lower.

 

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But the evidence is not overwhelming just yet - it’s too difficult to be certain at this juncture whether the trend has stalled out or has actually reversed. I need a couple of additional daily data points to make that confirmation. But given the uncertainty, I am moving to NEUTRAL (cash / money market) here. If we press lower in the next day or two, I may then send out a supplemental UPDATE advising a BEARISH advisory. On the other hand, if the market continues higher, then I will be forced to return to the BULLISH advisory at a higher price level – something I don’t relish.  

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Each month, Stan Harley publishes TheHarley Market Letter, a newsletter that provides advanced technical analysis of stocks, bonds, and precious metals. This is the latest update to the Harley Market Letter for March. Want to learn more from acclaimed market analyst Stan Harley? Visit his site and subscribe to the full Harley Market Letter.   


 

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