I highlighted a long-term buy signal in late July and early August when the monthly MACD of the NYSE Composite turned positive (see On the verge of a long-term buy signal and Trust (the bull), but verify (there’s no recession)). Historically, such buy signals have resolved in a bullish fashion with no bearish episodes and only normal equity-risk corrections.
The recent pullback has changed the MACD reading from positive to negative (circled). There were two other instances since 1995 when this has happened – in August 1999 and in May 2012. Both turned out to be false warnings and the stock market continued to rise soon afterward. Nevertheless, is it time to reconsider the equity bull case?
The full post can be found here.
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