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Weekly SP-500 Trend Commentary

May 30, 2011 10:32 AM ETSPY
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mybestfunds's Blog
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Seeking Alpha Analyst Since 2010

I've been trading part time for 20 years working to develop a strategy that allows me to focus on my day job while investing for today and my retirement. I've been heavily influenced by Mebane Faber's book The Ivy Portfolio. I do not follow Faber's technique directly, but have developed my own relative strength sector rotation strategy that I describe on my blog at http://www.mybestfunds.com. In addition to weekly market trend commentary, I provide weekly rankings of selected Fidelity, Schwab, Profunds, and Vanguard mutual funds and ETFs. The funds are selected and traded so there are no commission or short term trading fees. Fidelity Funds are traded/rotate on a monthly basis while Schwab, Profunds and Vanguard funds trade on a weekly basis. In the future, I will share more details of my strategy including backtest results, as well as establish model portfolios.
*** Status: Market Neutral/Caution – "Safe" Sector & Bond Funds ***
I was volunteering for the AngelRide charity bike ride all day Saturday and Sunday, so this post is a bit late this week. Sideways/Down action was the trend again this week.  The general market trading filter I use (SP-500 53 day CCI) is hanging on in positive territory at 19 indicating Market Up but this is down from 40 last week. However this indicator did flash bearish for a few days before recovering into positive territory.My multiple composite SP-500 indicators on the daily chart are essentially flat with neither of the Blau Ergodic Composite Indicator or the MACD composite indicating any strong trend. The CCI(53) indicators on the right on this page show a mix of bearish/bullish for the major indices and the IEF bond fund still strong.
The Guppy Plot for the SP-500 is now Neutral/Bearish, with the Fast moving averages intertwined with the slower moving averages. The average slopes of the two sets of averages are are now both negative, but heading up towards zero. The ADX components are bearish and the Stoch is low. Overall, extreme caution is indicated.
We’ll see what the next week brings. We don't try to forecast the market here, rather we just monitor the current conditions and react accordingly. I hope you find this blog helpful. If you do, why not leave a comment.
This week's Rankings continue to show a lot of “safe” sectors at the top such as Healthcare, and Telecomm and Bond funds.  Ranking scores are color coded to indicate positive ranking scores (rate of change / volatility) in green, and negative ranking scores in red. Overall the list is sorted by overall rank but the score that makes up the rank can be positive or negative depending on the recent rate of change. The full list of the funds that are ranked can be found under the Funds tabCurrent Rankings of the Funds can be found under the Rankings tab.
What Others are Saying (all free sites): Overall Neutral - Caution
AAII Sentiment:  26% Bullish / 33% Neutral / 41% Bearish
Barchart: 16% Buy (last week 24% Buy)
Bulkowski: Bullish (CPI=83% last week 13%)
Buy-Don't Hold: Sell (1)
Consensus Traders: 20% Bullish / 24% Neutral / 56% Bearish (SPY)
INO.comSidelines (SPY)
MyPlanIQ Trend Score6.96% (SPY 6.93% last week) 
Pattern Trapper: Bullish (SPY)
Stock TA (SPY): Bullish
Stock TrendsBullish
Wishing Wealth: Down Trend
dshort.com: Invested (Note - monthly 10-EMA signal)
Click on Charts to Enlarge
SP-500 Daily Chart for May 30, 2011

SP-500 Daily Guppy Chart for May 30, 2011

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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