S&P 500 Index (SPX-I)

There has been a 10% pullback this year and this tends to happen every couple of years with the S&P. But the component of tech stocks may mean more frequency for 5, 10 and 20% drops.

When he looks at a universe of stocks like the S&P 500, what he cares about is whether breadth has been improving or deteriorating. No bear market ever happened while breadth was expanding. He also tracks the percentage of stocks above 50-day and 150-day moving averages. Those are all expanding.

Forget what we think about seasonality and weakness in the second two weeks of June. Market's been pretty good since April. Still news risk, and the S&P hasn't been able to make a new high yet. But breadth is still improving. Unless that started to deteriorate, picking a price and hoping you're picking a top is a risky business.

Around the world, more and more markets are performing well. This speaks to $$ flowing into equities as a whole, not just in the US. Stocks are outperforming bonds pretty steadily. 

He'd wait to see some technical indication that we're going through a top before embarking on this strategy.

The post-election rally kept the S&P up, and Inskip was hoping it would remain above 5,850, a key level. It closed the week today at 5,827, crossing that support. Next level of support is 5,783. According to the Ichimoku Cloud, the S&P chart has turned negative, bearish. Inskip thinks we could roll back the entire post-election rally, taking us down to 5,783. The S&P broke below the 13-week average. 

For those starting with ETFs, he recommends a fully diversified portfolio. SPX is based in New York and VTI is for the total global market.