I just issued a Navigator continuation buy signal to the Founders Group on the S&P 500 Index Futures at 3915.25. The risk here is significant. I will be using the 5-day EMA on the daily chart as the stop. I am looking for a close below it to stop out. You can use the same strategy on SPY calls – using the 5-EMA on the SPY as your reference.
The market held 3900 this morning, so it is not quite ready to break yet. The buy signal actually came right around the 3900 level, but I waited for more confirmation. I will be 90% invested, retaining 10% for the XLF and XLE if the opportunity presents itself. There is a healthy representation in the S&P 500 already for both energy and financials.
Going into this market is one of the most difficult decisions I have had to make in some time. Realize the considerable risk at this moment. At the same time, if the decision was easy it would not be a good decision.
A.F. Thornton