So far BPNYA managed to stay above EMA(30) and if this rally resumes then BPNYA Index shall soon pass 70 mark, which will be our clue to get ready for SELL signal. Remember, all we care about is the time when BPNYA crosses EMA(30) downwards which triggers our SELL signal. BPNYA can remain above 70 for longer period and historically market has only managed to climb 3-to-4% that too with lot of bumpy action.
In a normal environment, technically we should see market rally resumes for another 800-1000 points from this stage. But considering we are in news driven environment and our next immediate concern is US debt reduction effort by 6 member Congress committee to be revealed by 23rd November. This gives us another 2 weeks for the rally and we may see another 600-800 points rise. At that point, markets will have successfully breached 200 MA (red line) considered as bullish sign and anyone who missed the rally so far will try to get in as fast as they can in anticipation of further upside. Since we already know what happened last time in August during similar debt reduction effort, we shall expect identical results around 23rd November. If appointed Congress committee is not able to come up with a debt reduction package as per expectations then most likely we shall see our debt rating reduced which will trigger the market decline. OR market may start dragging down in anticipation of above scenario ahead of time. We will find out soon....
For now enjoy the market upside until we get SELL signal.
What does it mean for our Long Term Investment Accounts!!!
401K/HSA/College Fund: We remain fully invested for now in the highest ranked Mutual Fund available to us. You can find the highest ranked Mutual Fund by using the spreadsheet available here.
Traditional IRA/Roth IRA: Based on our "Advanced Strategies" section we remain fully invested in ETFs using our BULL market ETF list as per highest ranked ETF.