The chart below is a daily chart of SPY that goes back to inception, which is about 18 years:
In addition to showing that the market is pretty much at a new high, this chart serves another important function - the chart above illustrates what I consider the long-term trend of the market:
- 100 day moving average greater than 150 day moving average = uptrend
- 100 day moving average less than 150 day moving average = downtrend
For example, throughout the entire mid-90's, the long term trend was up, which means forget about shorting stocks during that time. I only trade in the same direction of the long term trend.
The long term trend is now up, which is why I've only been long stocks (or short inverse ETFs).
Here are 2 stocks that I think look good this week:
Second:
I've got a (small) retirement account that I rotate between 3 mutual funds: bond fund, monthly income fund, and equity index fund. Although I was in the bond fund for most of 2012, two weeks ago my mechanical system suggested that I switch to the monthly income fund, which I did.
The mutual fund I hold is very similar in composition to the ETF above and is comprised mostly of Canadian dividend paying stocks and long term Canadian government bonds.
