The S&P500 index was up 1.7% last week and closed in all-time high 320.7 level, we are getting real close to the 320-325 levels we have forecasted for the market all those weeks ago.
The daily RSI is above 70 so we expect another correction in the coming days, which is a good indicator of a healthy market.
Many traders are wondering if they should enter the market at the moment, Is it too high? Is it not a bubble? As it is very hard, and maybe impossible to time the market, no one really knows what’s going to happen next, how and when the market is going to turn? The only thing an experienced trader might do is manage the risk in the portfolio, which means that trading should be as part of a process, this process involves timely entry and exits and more important- positions management, increase the size (risk) as the assets you are invested in are moving in your favor and reduce the size (risk) of the assets that move against you.
As for the current market conditions, we remain cautious for now as we recommend gradually increasing risk in equities but staying nimble on open positions.
Here is a heatmap of the different market sectors, as you may see the momentum had quite down a bit.
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Alon