Market Direction and Stock Trends

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The call for this week
By: Jeffrey Saut | October 16, 2017

. . .As for the equity markets, our models remain conflicted. The long-term model, which turned positive in October 2008 and has never given a negative signal since, remains positively configured. The intermediate-term model registered a negative signal in early August and has stayed negatively configured. The short-term model went negative at the beginning of August, flipped positive around the beginning of September, and turned negative again last week; hence conflicted. Even the astute Lowry’s indicators have mixed signals with a conventional short-term buy signal on August 31 and a trader’s sell-signal on October 9 when the Stochastic Indicator crossed below its moving average. We would also note that the S&P 500 (SPX/2553.17) has gone into a fairly tight trading range before just about every decline in recent history (see chart below). The SPX has once again gone into another tight range since the first week of October. This morning, the preopening futures are flat as 3Q17 earnings results begin in earnest. With the large-cap banks earnings nearly over, tech stock should become the focus for investors.

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