The short-term trend for the S&P 500 turned up in early July and remains up today, as the chart below shows:
I define the short term trend using a 20 and 50 day moving average, which are still positively aligned at this moment. Following my rules, I am allowed to continue holding stocks in my account for as long as that condition is true.
Meanwhile, as US markets meander, most commodities are either making new highs or are consolidating. Silver miners, for example, recently entered a new bull market this week:
The chart above shows SIL, a silver miners ETF. Notice the recent relative strength on this one. In addition to this ETF, other funds such as: GDX, GDXJ, GLD and SLV are looking similarly bullish.
With so many commodity stocks rising, it is no surprise that the resource laden TSX entered a new bull market for the first time in 14 months:
Like an enormous pendulum, the long term trend takes a while to swing around and only tends to happen perhaps 5 to 10 times per decade. Although the TSX is at about the same level it was 14 months ago, following this long term signal kept you out of this market, allowing you to capitalize on other, stronger, markets.
Lastly, over the past month, I've discovered some excellent trend following related websites (refer to my links section). There are quite a few trend followers out there and there are a lot of people who have blogs, but there are not many people who are trend followers AND who blog about it, so it's always a pleasure when I stumble upon one.
