The Iraqi election is out of the way and the market applauded.  Now what?  The FOMC meeting will be held today and tomorrow with a decision on interest rates being announced tomorrow.

This has been a very difficult market to call for me lately.  My timing hasn't been wonderful to say the least.  The S&P 500 has support and resistance every which way so anything can happen.  Point 1 below shows that the early highs of 2004 acted as a support level for last week's low.  Will it continue to hold up?  Point 2 shows a resistance area, albeit a shorter trend, but it is there.  Neither are very strong and one will give.


                                 Chart provided courtesy of www.decisionpoint.com

I normally like to buy weakness and sell strength so it was probably a mistake to sell Thursday's drop.  That was the emotional side of trading taking over moments before the deadline.  But I realize I have a lot of people watching and following these moves so I felt better being more conservative.  The extreme bullishness I had during the last half of 2004 has been replaced by uncertainty and a more conservative approach.  I don't even want to guess what may happen in the days ahead.  I'd rather see what happens and try to react. 

As much as I hated to miss 60% of yesterday's rally, I don't feel too bad about being only 40% invested in this uncertain period.  I'll try to let the market and the indicators tell me what to do.  That may be easier said than done.  If I had to use my own sentiment as an indicator I'd say it's time to buy... because of my elevated nervousness lately. 

That's all for today.  Currently 60% G, 40% C fund.  See you tomorrow.