The S&P 500 ($INX) completed another bearish spike reversal during February, making it the fifth consecutive month of conflicting technical patterns. Bearish spike reversals were completed during October, December, and now February while bullish new 4-month highs were posted during November and January. Theoretical Positions: Long-term investors are likely still long, though may have followed Warren Buffett’s lead and moved to cash given all the uncertainty in the S&P. Those looking for a stronger reversal pattern will keep an eye on the previous 4-month low of 5,696,51 from November.
The Dow Jones Industrial Average ($DOWI) completed a bearish spike reversal during December before consolidating during January and February. The previous 4-month low is now at 41,647.30 from November with a move below that mark confirming the next major downtrend. Theoretical Positions: Long-term investors are likely still long and keeping an eye on the previous 4-month low heading into March.
The Nasdaq ($NASX) still looks to be in a major uptrend, despite February’s lower monthly close. Theoretical Positions: Long-term investors are likely still long, though getting more nervous, with sell stops below the previous 4-month low of 18,112.83 from November. The Nasdaq closed February at 18,847.28, down 780.16 for the month.
The US 10-year T-note (ZN) is not as clear a read as it has been since the completion of the bullish 2-month reversal during October and November of 2023. For now, though, I’ll continue to call the major trend up based on the definition of higher highs and higher lows, until the ZN takes out its previous monthly low of 107-040 from April 2024. The market posted a low of 107-060 during January before closing at 108-270, up 0-030 for the month. Theoretical Positions: New longs might’ve been established near the November 2023 close of 109-150. Additional positions could’ve been established near the April close of 107-140. Another round of long positions could’ve been put in place during August as the ZN took out its Wave 1 high. Additional longs could be established near the November close, raising the overall position average to roughly 110-250. Investors could add long positions on a move beyond the previous 4-month high of 111-155 (December) during March. Sell stops would be below the January low of 107-060.
