As we start 2012, the Exponential Moving Average (EMA) has generated a "bullish signal" (15-week EMA > 40-week EMA). It generated a "bearish signal" back on August 29, 2011. Therefore, if you are so inclined, you may want to consider the long-side of the market by purchasing SPY, which is the ETF for the S&P 500. If you have been long SH, which is the inverse ETF of the S&P 500, you may want to consider moving into a cash position, or, as indicated purchasing the SPY. The choice is up to you. Another strategy, if you are long the inverse SH, would be to liquidate 50% of the position this week and see what the close of the market is this Friday, January 20.
In looking at the above chart, the price is still below the long-term bullish support line, which was penetrated in August 2011. This bullish support line was drawn from the low back in March 2009. Also, the price is still below the bearish resistance line from the top of August 2011. Given those two factors, I am inclined to believe that last week's EMA signal could be a false bearish signal. I will, of course, update this chart on Friday.
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