Which way?
Another positive day for the indices yesterday but it seemed a bit more labored. I am hearing a couple of theories for the short term action. Some people think we are not getting a pullback because too many people think we should get one. I like that type of thinking and it makes sense coming from a contrarian viewpoint. The other thinking is that too many people are thinking the first thought and that means we will get a pullback... I think.
When the market rallies then waffles around for a few days, you either get a continuation of the rally as we see at point A. Or you get a reversal like at the points marked B. It seems the B's are more common but it was this time last year that the market was strong enough to avoid a significant pullback.
Chart provided courtesy of www.decisionpoint.com
There really isn't much resistance overhead so moving higher is a good possibility. However, the indicators are overbought and that could put some pressure on the S&P.
Here is that 1994 chart again. 1994 had some very similar action to 2005, both in the flow of the stock market and the state of the economy. 1994 led to a big year for stocks in 1995 but the end of 1994 was very volatile and am still not ruling out something similar to end this year.
Chart provided courtesy of www.decisionpoint.com
You can see that at any rallying point at the end of 1994 (in the box) if you weren't in stocks it looked as if you were missing out. But each time the market rallied there was a significant pullback giving another buying opportunity. I am counting on some sort of pullback but hoping for a good buying opportunity like they had in December of 1994.
I know I sound like a broken record but the song remains the same. I am seeing strong evidence of a very good market for 2006. Until then it could be bumpy. I think you have a couple of choices. You can buy stocks now and check back in about 12 months, or patiently wait for a better buying opportunity that should eventually present itself. Either way your account should be in good shape a year from now.
Thanks again to all of you who are supporting the site by visiting the Item of the Day each day.
That's all for today. Currently 100% G fund. Thanks for reading.
Another positive day for the indices yesterday but it seemed a bit more labored. I am hearing a couple of theories for the short term action. Some people think we are not getting a pullback because too many people think we should get one. I like that type of thinking and it makes sense coming from a contrarian viewpoint. The other thinking is that too many people are thinking the first thought and that means we will get a pullback... I think.
When the market rallies then waffles around for a few days, you either get a continuation of the rally as we see at point A. Or you get a reversal like at the points marked B. It seems the B's are more common but it was this time last year that the market was strong enough to avoid a significant pullback.
Chart provided courtesy of www.decisionpoint.com
There really isn't much resistance overhead so moving higher is a good possibility. However, the indicators are overbought and that could put some pressure on the S&P.
Here is that 1994 chart again. 1994 had some very similar action to 2005, both in the flow of the stock market and the state of the economy. 1994 led to a big year for stocks in 1995 but the end of 1994 was very volatile and am still not ruling out something similar to end this year.
Chart provided courtesy of www.decisionpoint.com
You can see that at any rallying point at the end of 1994 (in the box) if you weren't in stocks it looked as if you were missing out. But each time the market rallied there was a significant pullback giving another buying opportunity. I am counting on some sort of pullback but hoping for a good buying opportunity like they had in December of 1994.
I know I sound like a broken record but the song remains the same. I am seeing strong evidence of a very good market for 2006. Until then it could be bumpy. I think you have a couple of choices. You can buy stocks now and check back in about 12 months, or patiently wait for a better buying opportunity that should eventually present itself. Either way your account should be in good shape a year from now.
Thanks again to all of you who are supporting the site by visiting the Item of the Day each day.
That's all for today. Currently 100% G fund. Thanks for reading.
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