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As you know, the S&P 500 Index is widely considered the benchmark of the US Stock Market, so following the light signals is our primary guideline to the direction of the US Markets. The signal remains Red since October 2018.

The table above is the correlation tracker of the Dow (DIA 97.1%), Nasdaq (QQQ 97.2%), and Russell 2000 (IWM 89.2%) index relative to the S&P500. As you can clearly see, since 1970 the Dow and Nasdaq move in the exact same direction as the S&P500 97% of the time; the Russell 2000 does 89% of the time.  What that tells you if the S&P500 signals change color, you can almost assure yourself the other indexes will follow the resulting direction. This is why we named it the Wealth Preserver.  

 

The Daily chart:

As you can see in the daily chart, taking a bullish position on December 28 would have captured a nice gainer thus far and what looks to have been the bottom of a correction. 

 

The Weekly Chart

The weekly chart is supportive of the turn and bottom that occurred the last week of December. Although the volatility of the market was not fully complete, it appears a significant rally is currently underway. Is this just a rally before another leg down?  If we look at the rally from the May 2018 green light through October 2018 it leaves us questioning the current upswing.  Because the Dow is back solidly in the trend channel, this bull should continue longer term.

 

 

The Monthly Chart

The current month of February is showing strength in support of both the Daily and Weekly charts. The signal at the monthly level has not turned green just yet. But with the daily and weekly strongly in the green and the Dow back in the bullish long term trend channel, a green light should appear in the near future.