The market needs to prove itself now.
Another very nice day for the market Monday, although the volume (number of shares traded) was very low. The low volume could have been because of Passover. Once again the S&P 500 is up against resistance and needs to prove itself. There are two trend lines above that used to be support that will now act as resistance. We also have to contend with the 20 and 200 day moving averages. A break above 1163 on good volume would make me feel a lot better.
Charts provided courtesy of www.decisionpoint.com
We also have that PMO indicator I talked about last week (in the middle of the chart above). We want that blue line to cross over the 10 day moving average (green line) to give us a second buy signal. That second buy signal is usually a great indication of a strong rally to come.
I am once again at the point of analysis paralysis. The market really needs to make a move this week. The indicators are again all in place but recently the market has failed to follow through on any rallies. It is put up or shut up for me I know. I have been saying for weeks now that a bottom is forming. The bottom appears to be forming but I'd hate to see us get overbought again before some sort of breakout. A move to 1175 would do that.
2005 may not be a great year for stocks so short term traders / investors may want to take advantage of opportunities. Right now appears to be one of those buying opportunities. I have mentioned repeatedly that we appear to be following the chart of 1994. In 1994 we had a similar economic picture. What happened to the market and each index is interesting to note. When the S&P 500 found a bottom in April of that year, the Nasdaq and small caps did not. This is one reason why I am leaning toward the S&P 500 and the C fund right now. Take a look at the differences in these charts from 1994...
Charts provided courtesy of www.decisionpoint.com
I believe we are currently at the bottom of that waterfall-like decline we see in late March of 1994. That marked the bottom for the S&P 500 but not for the Nasdaq (or the small cap stocks). For this reason I plan to stay mainly in the C fund when I am in stocks this spring and summer. You can see it was not an easy call that year. Very choppy markets can be handled one of three ways. Stay in. Stay out. Or play the chop. Once we get back to overbought, I will lighten up on the S fund.
That's all for today. Currently 50% C, 20% S, 30% I fund. See you tomorrow.
Administrative note: I am weeding out bad email addresses as we approach 5000 email alert members. I deleted over 200 addresses because they were either invalid or being blocked by an ISP. Because I send out multiple emails, sometimes using the same subject line, this mail may be flagged as spam by your ISP. If you think you should be getting the emails but you are not, you may need to sign up again, but you will also have to get your ISP to stop blocking mail from alert@tsptalk.com. I know email addresses with ".rr." (Road Runner) in the name have all had problems.
Another very nice day for the market Monday, although the volume (number of shares traded) was very low. The low volume could have been because of Passover. Once again the S&P 500 is up against resistance and needs to prove itself. There are two trend lines above that used to be support that will now act as resistance. We also have to contend with the 20 and 200 day moving averages. A break above 1163 on good volume would make me feel a lot better.
Charts provided courtesy of www.decisionpoint.com
We also have that PMO indicator I talked about last week (in the middle of the chart above). We want that blue line to cross over the 10 day moving average (green line) to give us a second buy signal. That second buy signal is usually a great indication of a strong rally to come.
I am once again at the point of analysis paralysis. The market really needs to make a move this week. The indicators are again all in place but recently the market has failed to follow through on any rallies. It is put up or shut up for me I know. I have been saying for weeks now that a bottom is forming. The bottom appears to be forming but I'd hate to see us get overbought again before some sort of breakout. A move to 1175 would do that.
2005 may not be a great year for stocks so short term traders / investors may want to take advantage of opportunities. Right now appears to be one of those buying opportunities. I have mentioned repeatedly that we appear to be following the chart of 1994. In 1994 we had a similar economic picture. What happened to the market and each index is interesting to note. When the S&P 500 found a bottom in April of that year, the Nasdaq and small caps did not. This is one reason why I am leaning toward the S&P 500 and the C fund right now. Take a look at the differences in these charts from 1994...
Charts provided courtesy of www.decisionpoint.com
I believe we are currently at the bottom of that waterfall-like decline we see in late March of 1994. That marked the bottom for the S&P 500 but not for the Nasdaq (or the small cap stocks). For this reason I plan to stay mainly in the C fund when I am in stocks this spring and summer. You can see it was not an easy call that year. Very choppy markets can be handled one of three ways. Stay in. Stay out. Or play the chop. Once we get back to overbought, I will lighten up on the S fund.
That's all for today. Currently 50% C, 20% S, 30% I fund. See you tomorrow.
Administrative note: I am weeding out bad email addresses as we approach 5000 email alert members. I deleted over 200 addresses because they were either invalid or being blocked by an ISP. Because I send out multiple emails, sometimes using the same subject line, this mail may be flagged as spam by your ISP. If you think you should be getting the emails but you are not, you may need to sign up again, but you will also have to get your ISP to stop blocking mail from alert@tsptalk.com. I know email addresses with ".rr." (Road Runner) in the name have all had problems.
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