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Technicals Unchanged As We Face Red-Line Resistance Moment Of Truth For S&P500

The trend momentum power remains a very strong 80% bull.

The stock market churned sideways once again yesterday, resulting in zero change in the technical set-up.

The chart of the short term indicator below shows the S&P500 remaining in an uptrend, confirmed with bullish action of the hedging indicator, which all says to give the bull case the benefit of the doubt at this time

However, the last bull trade from a short term trading stance - entered on the last green and blue arrows - was exited recently on the yellow arrow, with the S&P500 going sideways ever since.

That yellow arrow had us move the TNA portion of the hedging side of the portfolio to cash, as such exiting of a short term trade usually leads to a change in trend for the hedging indicator.

Last year, entering a position when two indicators triggered a new signal, and exited that trade when any short term indicator triggered a signal in the opposite direction, returned 33.6% trading the S&P500 without leverage.

The hedging indicator itself as a standalone strategy returned over 100%.

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The stance of this chart signals the optimal allocation at this time is 90-100% long for conservative and 401K investors, and 180-200%, long for more aggressive, with the first number if the hedging component is being employed, while the second is without hedging.

Things can get crazy bullish if the S&P500 can break above that dotted red line, though the bears have a chance of forcing a larger corrective while ever the S&P500 remains south of that breakout line.

Disclosure: I am long SSO.