Dan Murphy of ‘Million Dollar Target’ emailed his latest Smart Money Indicator report on May 17, 2018. He uses proprietary algorithms to process the monthly Commitment of Traders (COT) Report, publicized by the Chicago Board of Trade. His current Buy-Hold-Sell recommendation is shown in the SMI graphic.
The long term SMI portfolio strategy manages a small basket of ETF indexes. Depending on the COT report, funds are shifted from cash into either the SP500 (SPY), Long Term Bonds (TLT) and, Short Term Bonds (SHY). On rare occasions when the market is undecided and consolidating sideways, the signal may be to move some or all funds in cash. A summary of his current read on the markets begins with;
– The S&P 500 is on a sell signal, and has not improved as of yet.
– Long-term U.S. bonds are on a hold.
– Short-term U.S. bonds are on a sell.
What’s interesting is that small cap stocks (as represented by the Russell 2000) are doing well, and have made new highs.
No wonder why stocks selected by my ‘DB Transactions’ strategies are doing so dang well and are soundly beating the indices.
But the large cap rallies are still getting crushed down like a Sumo wrestler on top of a wicker lawn chair.
If you follow Dow Theory — which is simply trend following using both the Dow Industrials and Transports — it’s also on a sell signal.
The Smart Money says hold TLT, and see what happens in future COT reports.
Dan “Prince of Proof” Murphy
Dan’s long career in trading the markets has given him extremely accurate insights into the internal health of the market. In my opinion his monthly SMI update is the most dependable signal for managing a long term investment account.
Currently Dan has no open memberships for his other short term and long term advisories but if you’d like to receive his free monthly email with active updates on the SMI you can contact him at his email address below.
Joshua Tree Financial, Inc
2751 West Coast Highway
Newport Beach, California 92663