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S&P 500 Weekly Update: Stay The Course And Look For Opportunity In This Tricky Market Period


  • The near term remains sketchy with more downside probing, while the long-term view suggests higher stock prices.
  • Economic data remains positive here in the U.S. while the global picture remains questionable.
  • Pullbacks should be contained, be patient and use weakness to add to positions.
  • Technology is where the growth resides, this pulback will be temporary.
  • This idea was first discussed with members of my private investing community, The Savvy Investor. To get an exclusive ‘first look’ at my best ideas, subscribe today >>

"Positive thinking will let you do everything better than negative thinking will" - Zig Ziglar

Distractions continue to hound investors. The markets have a way of making investors fearful whether stocks are up, "they can't rise any further, can they?" or down, "surely the worst is yet to come, right?" It's always something, which is what makes the markets both fascinating and frustrating.

What really matters are corporate earnings. On that score, the situation looks encouraging as we look out to the end of this year. The stock market is a leading economic indicator and will tell us in advance what’s in store for the economy going forward.

It should be quite obvious by now that the market determines what is important and what is not. It will do so more accurately than pundits, analysts, and the army of investors who believe they can outwit the market.

That's the way it has been for decades, and will continue to play out that way. Market participants will invest based on their own interpretation of the news events of the day. However, the price action of the market will clarify what is important, and what is not, far better than any individual can.

Listen to the market, and listen closely. Successful investors are in sync with what the market is telling them. It’s simple, if a market participant is not listening to the message, they are going to suffer constant under performance.

This year is yet another great example of listening. The quick drop in the major averages in January sent a message. The market had gone up too far too fast. During the consolidation period, it was thought that the market TOP was in. Not so fast. The decline found support and started to put in higher low after higher low. The problem was so many didn't have

Learn to use the FEAR of others to your advantage. The Savvy Investor Marketplace service is here to help. Subscribers just took advantage of the recent run to new market highs while many were listening to the trade tariff talk. This is not the time to navigate the markets alone.The reviews tell the story. Please consider joining one of the most successful new ventures here on Seeking Alpha.

This article was written by

Fear & Greed Trader profile picture

Fear & Greed Trader is an independent financial adviser and professional investor with 35 years of experience in all market conditions. His strategies focus on achieving positive returns and preserving capital during bear and bull markets and he has a documented track record of calling the equity market correctly for the 10+ years.

He is the leader of the investing group The Savvy Investor where he focuses on sharing advice to help investors avoid the pitfalls that wreak havoc on a portfolio during bear markets. Features of the group include: Macro updates 7 days a week, ETF selections, covered call writing strategies, and live chat 24/7. Learn More.

Analyst’s Disclosure: I am/we are long AVGO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

My portfolios are ALL positioned to take advantage of the bull market with NO hedges in place. This article contains my views of the equity market and what strategy and positioning is comfortable for me. Of course, it is not suited for everyone, as there are far too many variables. Hopefully it sparks ideas, adds some common sense to the intricate investing process, and makes investors feel more calm, putting them in control. The opinions rendered here, are just that – opinions – and along with positions can change at any time. As always I encourage readers to use common sense when it comes to managing any ideas that I decide to share with the community. Nowhere is it implied that any stock should be bought and put away until you die. Periodic reviews are mandatory to adjust to changes in the macro backdrop that will take place over time

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (338)

The menu for the day is Timberoni pasta with red sauce
Peace Grunt USMC profile picture
And here's a little something to go with that delicious dish as you contemplate the coming crash. . . .

"Another little Drink Wouldn't do us any harm"
Fear & Greed Trader profile picture

the topic was discussed with members of my Savvy investor marketplace group last week.

thanks for bringing it up here.
ytsan era slasrever evaw ht5 cilobarap
LTTFTrader profile picture
109, I can read backwards.

I spent a whole lot of time long ago on Elliott Wave. My advice is to forget it as a way to make trades with much of your money.

I followed the "expert", one alleged Mensa genius in the mid-1980s.

The '87 crash caught him flat-footed and he remained bearish for years after that, totally missing some huge bull markets. Fortunately I began ignoring him in 1989.

It works in hindsight but you just can't trade all of your money based on hourly squiggles in the DJIA.
And I mean that sincerely to all of the knowledgeable traders and chartists out there.
The basics of EW is that it starts at the top or bottom with a wave 1 and wave 2
Followed by A and B
Some of these will play out for weeks and months
Some of them can take days or even minutes
This is followed by a BIG wave 3 , then 4 then 5.
I am sure that you can agree with this so far
As in the case of Tsla it took 9 months for 1 and 2 and 5 weeks for
A and 2 weeks for B
Wave 3 for Tsla will take it probably close to $100 and can take 1 week or 1 day
So QQQ completed wave 1 and 2 and A and B
So did IWm
So did VIX
So did TLT
SO did GLD
So did the Dollar
Add in a SKEW 6 points off the top
and you have a recipe for disaster when you add in the fact that there has been no correction in 10 years
So where is support?
You can draw lines all day long but if this walks down Everyone will get the idea along the path that the bull is over
And some point everyone will start unloading
Who is going to buy all the share trying to find a buyer
28T out there.
Thats why markets crash
Now you can say that you and everyone else has studied all the events leading to sharp reversals
But the truth is Nobody has been here at this point have they?
So no one really knows what happens here at this "new highs daily" all time high .
The opioid crisis is not only on main street but evidently also on Wall Street
Gotta have it .and more of it
Does your 35 years of experience not tell you something is wrong
or have you also come to believe that this lasts forever without questioning it?
These down in the Am and buy it back in the afternoon , down one day and up the next day events, not seem odd to you?
Please look at a 30 minute chart of GOOG
Tell me these are people, please
If they are then schizophrenia is rampant .
Something is wrong and I can tell you,
its not me...
random_clown profile picture
I am sure that you can agree EW analysis always works perfectly, except when wave 1 is misidentified as wave 2, or big wave 3 starts at the top instead of the bottom, or that A is really B and/or certainly not C. Whenever I get confused with my own analysis I simply re-watch the classic welk EW training video. And a one and a two and a three:
scotch64 profile picture
Is anyone following a SA article covering this , much appreciated ?
Sorry to interject F&G on a fine article , but I know this is somewhat relevant and this is one hell of a pool of "centered" participants you draw on your coverage .

"All about major changes to Wall Street's broad industry sectors"

You are correct, I dont
But I am trying to help you and others save yours
There are a few reasons people are still in this market
GREED wanting more
HOPE hoping it will go higher
IGNORANCE ...not educated in the signs that precede a crash.
BELIEFS.. believing the fake headlines and opinions

What signs?

Maybe I missed it but I didn't see any actual evidence you posted. Honesly it sounds more like ZeroHedge type of sky-is-falling warnings on steroids.

What evidence?

And what chart patterns?
You have to have a trained eye for many charts , not just one
I cannot post them as I am not a contributor
But if you listened to me and took out your cash , you would lose NOTHING
In a few days check it out again, see if I was wrong
JC ROCHESTER profile picture

Update on RUSL. :)

Just sold it @$37.25 [on account of R5>30, >+1ATR advance and EMA50 resistance], netting a modest profit of +15.7% in 5 weeks [+157% annualized]. having bought it @ $32.2 (posted on Aug 10, 2018. 02:29 PM time-stamped).

With PPO still negative upside is limited from here.

However, the bullish +dvP pattern currently in place augurs well for further advance in the future, with good chance of PPO eventually crossing above zero.
Accordingly, I intend to re-enter upon retracement to EMA20 support ($33.7 at present and trending up) or below.
Wrong idea
Now you enter RUSS at 19.36 and ride it to $100
I repeat
Get out TODAY !!!!
Market crash ahead
JC ROCHESTER profile picture

As if you had track records of making any money at all, LOL.
is today still the day?
JC ROCHESTER profile picture

"10966361" will be saying that for the next 30 years every day his delusion does not come to pass, LOL.
Fear & Greed Trader profile picture

They are of NO concern , the price action is telling a diff story form any of those indicators.

Best to you
Are you still convinced or has the writing on the wall finally made its point to you
Today's action should have told you 20% this week is on the table
LTTFTrader profile picture
S&P drops less than 1% from its all time high and therefore, now it's likely to drop another 20%? This week??

My, my...
Yes it will drop 20% this week


Take it from someone who can read a chart.
Now I know how Noah felt with all the disbelievers around him, while building his ark.
random_clown profile picture
@Fear & Greed Trader
Seeing some headlines elsewhere like this:
"Hindenburg Omen and Titanic Syndrome have been flashing repeatedly this month"
Hope you can say if these "indicators" are of concern to you in your next weekly update. Thanks!
I am setting an order for SOXL at K- on Etrade....is the "Extended Hours 7am-8pm" the correct option or should it be "Good for Day"?
JC ROCHESTER profile picture

"Extended Hours 7am-8pm" looks fine for your SOXL buy order at K- with your Etrade account.


At Fidelity, there are 3 sessions:
"7:30am-9am" pre-market session,
normal session of "9:30am - 4pm", and
"4:30pm - 8pm" after-hours session.

There is also a "day+" option that combines normal and after-hours sessions.
thanks @JC ROCHESTER !!! had to sign a waiver also.

looks like similar options too:

E*TRADE offers pre-market, after-market, and overnight extended hours trading sessions on official market business days (excluding market holidays).

Pre-Market Session: 7 a.m. until 9:30 a.m. ET, Monday through Friday

Regular Trading Session: 9:30 a.m. until 4 p.m. ET, Monday through Friday

After-Market Session: 4:00 p.m. until 8 p.m. ET, Monday through Friday

Extended Hours Overnight Session: 8 p.m. until 7 a.m. ET*, Sunday through Thursday. ADDITIONAL RISKS APPLY, PLEASE SEE SECTION 3 BELOW..

if it doesnt get executed ill need to enter a new order at 7 am?
JC ROCHESTER profile picture

The "waiver" is just normal legalese so the brokerage firm wouldn't get sued in case the customer loses money while not in regular day session. :)

[ I think this custom got started back in the 1980s when a novice lost a fortune trading options and he blamed Merrill Lynch for not properly warning him beforehand that options could lead to financial ruins.
He appeared on 60 minutes with his complaints and won a multi-million-dollar lawsuit against Merrill Lynch subsequently on account of emotional damage, LOL.]

I don't think Fidelity has an "Overnight Session: 8 p.m. until 7 a.m."
Perhaps, I should suggest to them. :)

I normally don't get around to using the "7am-9am premarket session" because I am a habitually late riser.
Instead, I place my orders right before I go to bed after completing the end-of-day homework.

Every now and then, there may be opportunities during after-hours sessions, particularly on the heels of sharp run-ups or declines.
As you may have ascertained by now, my methodology basically takes advantage of periodic excesses in either direction in a well-defined time window like clockwork.

RSI, PPO, Keltner, EMA and ATR (5 fingers on my hand) are all I need to place orders with confidence every day. :)
do you know what time this correction will start? i have a busy day and only 30 minutes for lunch so want to make sure i sell at the right time today
JC ROCHESTER profile picture

What should your punishment be when your hysterical claim is wrong and the market goes up gangbusters instead, LOL?
IamTheWolf profile picture
@JC ROCHESTER he'll likely has been, and will be, badly punished already
Fear & Greed Trader profile picture

excellent observation 👍
This is a follow up to my post from Saturday. Last week with significant numbers of professional traders out of the market and possibly on vacation, the SP went down every single working day. This week with the professional traders back on the grind, the first two days of the week the SP has been up. This is not proof of anything but it is consistent with the theory that pairing amateurs with horrible news of chaos and mayhem are not a good thing for market profits.

Have fun.
the conservative speculator profile picture
Fear & Greed is THE only author I follow on SA, I pretty much unsubscribed from the others as a waste of time.
I also watch Chris Ciovacco's youtube videos, and follow Bespoke Investment Group's excellent research. Finally I listen daily to my main man Mr. "Secular Bull" Jeffrey Saut's commentary on Raymond James.

But I have to admit I do read Lance Roberts and John Hussman sometimes, we aren't all perfect! its like mixing in some 3 stooges after watching something enlighting.
Fear & Greed Trader profile picture

welcome and thank you for the kind words. its always a good idea to read all opinions,

I like to see what the other side is saying these days as well. 😎
Land of Milk and Honey profile picture
I bought in the Friday dip was Nike and more INTC. Sales/earnings matter & I expect the Nike sales are undercounted. But this is short term, maybe a year and keeping a close eye. I didn't think INTC was at a bottom, but close, & I didn't want to do that "wait & miss it" thing.

So you're seeing strong possibility of more pullback?

On the international decline significant factors are the UK, EU Brexit, at this point it's safe to call it a, fiasco. Italy for EU too. Asia feels USA doesn't have their back in general, while India is in Asia but outside of that fray and doing well. South America has one gov't issue after another. So this may be the usual complexity, that causes international movements. Meanwhile, I"m waiting for the bear to end in Asia! so I can start buying!!

So will the buy before Rosh Hashanah and sell at Yom Kippur hold this year? I didn't buy for it, but it's happened quite a few years from what I remember.

Thanks for all the details and assessment!

May you and all the readers here be inscribed for a great new year :) I hope you're not in the Hurricane path...!
Fear & Greed Trader profile picture

i am close enough to the path to be concerned and in prep mode.. 😎
Land of Milk and Honey profile picture
FG - lot's of safekeeping to you! Hope it all goes smoothly!!
LTTFTrader profile picture

Best wishes to you -- it appears this will be a real challenge for a great many people.
Peace Grunt USMC profile picture
F> - "Since the June lows, we have seen a nice stair step pattern play out."

It has been a thing of beauty. The pattern is clear. It goes up a hundred points, give or take, retraces, then heads back up to eventually go another hundred still; (approximately) 2600-2700-2600-2700-2800-2700-2800-2900 . . .
Fear & Greed Trader profile picture

and that is a healthy sign 👍
JC ROCHESTER profile picture
@Peace Grunt USMC,

All the 3 factors that will help reversal in precious-metals sector appears to be place. :)

First and foremost, a bearish Trader Vic's 2-b reversal pattern in UUP (US dollar) appears to be finally in place, prompting traders to further unload, which in turn is precisely for GLD and GDX need for sustained advance.

I am keeping close watch on the eventual X-down in PPO-weekly, which would confirm the UUP's nascent down trend.
Peace Grunt USMC profile picture
Interestingly, GDX is up 3.87% today and back above $18.00
LTTFTrader profile picture

"Goldman Bear-Market Risk Indicator at Highest Since 1969": www.bloomberg.com/...

A bear market indeed had begun by 1969. However, take a look at the chart in the article and see if you think you could use it to know when to sell. I couldn't. Moreover, here's one important fact they omitted:

The daily NYSE cumulative advance-decline line peaked on May 6, 1965. When the market finally peaked on Nov. 29, 1968, the S&P had risen by almost 21%. But the cum. a-d line had DECLINED by almost 11%. This is a classic bearish breadth divergence, seen at every important market top.

The cum a-d line recently peaked on August 29. So, unfortunately for Goldman, today's situation is nothing like that of late 1968.
Fear & Greed Trader profile picture

thanks for the info ,

more silliness.

You wrote:
"The U.S. had the lowest average tariffs compared to other developed countries in the world. Our average tax rate was the highest in the world."

I am not sure where you obtained this information but it is just plain wrong. A quick search will bring up a number of sources for this information by country and in none of them does the USA have the lowest tariffs or highest tax rate. In some of them the USA is somewhere in the middle. In most of the tables Australia (where I live) has lower tariffs than the USA. You could reason that we are not a "developed country" but I would be interested in the criteria you would use.

And this is before we even attempt to include subsidies (a trade weapon or tariff by proxy). I have been watching (with mounting resentment) various US companies using all forms of tactics to get tariffs imposed on their Australian competitors citing the most flimsiest reasons, the US administration appears to grant tariffs without looking at any evidence (or doesn't care). Of course, these days being a long term ally and having a bilateral trade agreement that greatly favours the USA doesn't mean a thing.

pro8 profile picture
Today, the U.S. applies a weighted average tariff of 1.6 percent on its imports, one of the lowest rates worldwide, according to World Bank data. """That's equivalent to the EU and a rate similar to Japan. """"

The U.S. is not alone in that and it brings into question why we hit the EU with tariffs in the beginning.


The claim: The U.S. has the highest corporate tax rate in the world.

The short answer: That is generally true, though many businesses end up paying far less than the statutory rate.

Fear & Greed Trader profile picture

ok possibly not THE highest.

in comparison to other develop economies, weren't we the one of the HIGHEST corp tax rates in the world?. Weren't we among the lowest tariff in the world ?

we need not be THE highest or THE lowest to see the point being made here.

best of luck

I have noticed a tendency for many writers and commentators in U.S.A. to take on the victim role. Perhaps, I am being a bit sensitive and seeing things that aren't there. Just as well, taking on the viewpoint of a victim can introduce unconscious biases.


This was an excellent article. The first 5 paragraphs on the Global economy was so well written and so true. For many years I have been wondering when someone would realize how important it was to fix the trade deficit. All those jobs, company intelligence and money spent to transfer jobs out of this country and outside of Ross Perot and a few others, no one said anything about it.

That alone was worth reading the article but the information that was presented throughout the piece was excellent. Thank you for writing.
Fear & Greed Trader profile picture


and thanks for the comment
Although I think thorough analysts like the author can tell us when it's unwise to sell stocks for fear of a 20-30% longstanding correction , I don't think they can reliably also do the opposite (ie, consistently time the market- no one can). In other words, I would be surprised to see FGT title of 'stay the course' replaced with 'Sell your index funds now' while prices are still high- & certainly thought provoking. Finally, studies show that moving average metrics can be effective to minimize drawdowns, but do not generate greater income long-term than buy & hold for the SP500.
But then again, 'seeking alpha' is a subtler way to say "I timed the market!", ;).
Fear & Greed Trader profile picture
no it will a gradual change

again the LT charts tell us there is time and also keeps us from making premature moves.

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