Important signals were present in the period leading up to the U.S. election in 2016.
TD Sequential Sell in August 2016 lead to a 5% decline into November.
A Sequential 9 Buy Setup and CAP II Alerts identified hard oversold conditions within a dominant uptrend as of November 2, 3 and 4 of 2016. These were the first such signals since the October 2014 bottom and presented a low risk buying opportunity.
The breakout to new highs and upside Exhaustion Alerts coming out of a two-year trading range were seen as a 'Sign of Strength'. Minor corrections to the 20 or 50-day exponential moving averages after such 'Signs' are anticipated to provide new entry points.
Multiple Springboard Alerts (minor oversold readings in a flat to rising trend) identified five correction opportunities. In so many words, this 'Buy the Dips' model works until the trend becomes climactic or rolls over.
In the last two weeks of January 2018 the Dow Industrials and S&P 500 generated the first upside Trifectas in over twenty years. This anomaly identifies simultaneous upside Exhaustion Alerts in the daily, weekly and monthly charts. It also saw Sequential and Combo 13 sell signals. The markets subsequently dropped 12% into the first week of February.
The break triggered CAP II buy alerts and a DeMark Sequential 9 Buy Setup on February 9th. This was followed by a TD Sequential 13 Buy in the Dow on April 3rd and the S&P on April 24th.
We highlighted the rotation to strength in the small cap indices (IWM) which made all-time highs in May.
The normal action once the Dow has achieved a 261.8% retracement in the last one hundred years has been a quick correction back to the 20 or 50-week exponential moving average before the next sustainable rally.
* The February low bounced from the 20-week ema and the April low tested the 50-week ema.