11,550.

That’s the last 5% line on the Big Chart that will give us a sign that it’s time to raise our Must Hold levels – raising the trading floor on the markets 10-15% (still TBD) to S&P 2,100ish. That would then become the bottom of our trading range and will influence where we begin to put our CASH!!! to work – at much higher levels.  

As you can see from the chart, the NYSE (our broadest index and the hardest to manipulate) has been in a very tight range, between 9,500 and 11,000 since late 2013, which is when we drew up the lines on the Big Chart, predicting 11,000 would be fair value for our Must Hold floor by the end of 2014. Since then, though tempted, we have not had reason to change our market valuation and we do currently think the market is OVER-valued – so we’ve been reluctant to move the needle, even as the NYSE has punched over on the Trump Rally.

Those of you who follow PSW know that our Big Chart has been all green on the Must Hold lines for quite a while and the NYSE is the lagging indicator and EITHER it is going to start catching up and that will signal a broad-based, sustained bullish change in the markets or (more likely) it indicates that the Dow, S&P, Nasdaq, and Russell are all easily manipulated and show a picture of a market that simply isn’t reflected in the reality of the action of 2,800 stock NYSE, which trades twice as many shares per day (3.2Bn) as the Nasdaq (1.7Bn).

In fact, yesterday’s action was a good example of how manipulated the market is as there were 2,100 declining stocks and only 920 advancing stocks and the declining volume was 2.4Bn while advancing was 769M yet the indexes were essentially flat. How is that possible? Because, in the junior indexes, there are certain key stocks like Apple (AAPL), for example, that have ridiculously outsized weighting and you can keep that one stock afloat while selling 100 others and you can still give the Nasdaq a positive spin on the day.