The U.S. stocks are already somewhere between pricey and very expensive, based on various historical measures. Expensive stock markets tend to produce sub-par returns over time, almost regardless of what happens in the economy. Cheap markets, by contrast, tend to produce strong returns. However, Dow Jones Industrial Average is down 1,000 points from its peak in the spring. It’s never a good idea to panic or get too alarmed but important to keep perspective.

The market needs a harder sell-off and a deeper low in order to reload the high octane fuel much needed to send it higher. That kind of pullback doesn’t have to mean an end to the bull market, but it can mean the kind of shake-out we had last year around October. A sell-off of that magnitude allows short sellers to really load up with a lot of borrowed shares that they’ll have to cover when the market finally hits a capitulation low like it did in October 2014.

Make sure you resist the call of the Wall Street pundits and follow your own logical thoughts and discipline. Optimism is rampant at the top, perpetuated by the so called “gurus.”

For now we shall trade with a short term perspective. It looks like it’s all about our Index Trader System, both US and Canadian. As for the US Portfolio system which follows a volume driven algorithms, we are all in cash for equity and bond sectors. The volumes are just not there for large institutions.

Signal Pages Snapshots as of Friday night August, 14th

U.S. Index Trader:

In Cash (we cashed out on August 10th)

Symbol Signal Date Entry Date Entry Price Stop Price Latest Closing Gain/Loss $ Gain/Loss % Action
TLT 7/29/2015 7/30/2015 $121.21 $21.00 $123.41 $2.2 + 0.27 Dividend 2.01% Cashed Out

Canadian Index Trader:

Symbol Signal Date Entry Date Entry Price Stop Price Latest Closing Gain/Loss $ Gain/Loss % Action
XLB.TO 7/29/2015 7/30/2015 $24.09 $24.00 $24.20 $0.31 1.3% Stay LONG

US Equity Sector Portfolio

In Cash

US Bond Sector Portfolio:

In Cash