Seasonal MACD Update: Still on Hold By: Christopher Mistal | November 09, 2017 | Email | Print

As of today’s close, our Seasonal MACD Buy Signal is still on Hold. Our 8-17-9 MACD “Buy” indicator applied to DJIA and S&P 500 is still negative (blue arrows in charts below). NASDAQ’s MACD “Buy” indicator is positive, just barely. S&P 500 was briefly positive, but today’s losses have turned its MACD “Buy” indicator negative.

 

The criteria to issue our Seasonal MACD Buy Signal is a new buy signal using our 8-17-9 MACD indicator on or after the first trading day of October and DJIA, S&P 500 and NASDAQ must be in agreement.

 

This criterion has not been met yet. A one-day DJIA advance of 420.24 points (1.83%) would turn DJIA’s MACD positive and S&P 500 needs to advance 16.28 points (0.63%) for its MACD indicator to turn positive. NASDAQ also needs to gain 16.01 points (0.24%) tomorrow or its MACD indicator will also turn negative.

 

 

Over the years there have been 15 Seasonal Buy Signals that were issued in November or later since 1950. This is approximately once every five years that the signal was issued in November. The latest November trigger was November 29, 1971 (only December 11, 1973 was later) while the most recent November signal occurred in 2012. With this in mind this year’s “late” signal is not all that unusual. All things considered, this year’s pending signal could still prove timely. 

 

Major tax overhaul is still a work in process and the final bill is still unknown. In addition to this, Congress has yet to deal with the looming budget deadline which is rapidly approaching. Geopolitical events continue to heat up as well. North Korea has been relatively quiet, but the fall of ISIS in the Middle East is only opening new doors that lead to future uncertainty in the region. Any one of these issues could be the catalyst for a brief and rather overdue market pullback.