On Friday February 28, 2020, our Simple Rule generated an overall bearish signal, for the first time in over a year. This means that not only did our fundamental signals generate a bearish signal but that our technical signals also confirmed this bearish signal. Clearly this happened after the monstrous sell-off in the US equity markets in the week ending February 28th.
It’s very important to remember that this bearish signal does not apply to any single equity security. Instead, it applies only to the entire S&P500 index as a whole.
So as of now, our Simple Rule is suggesting that one should exit any long positions in the S&P500 index, and go to cash or cash-equivalent securities.