Hi there, and welcome back to RI's S&P 500 blog.
Since the market's short term failure two trading weeks ago, our downside target has been a serious test of the July 14th lows at or near $120.02. Considering the significant trend line that exists just below this mark it shouldn't be a surprise to see the market shoot past the 120 level and bounce off the trend line (blue line above). Short term traders ought to consider covering short positions should we trade down to this level.
Regardless, over the medium term, the market continues to forge lower lows and lower highs suggesting we are still very comfortably contained within a bear market. That posture will change with a close above $132 on a weekly basis and a cross of the 13 EMA and the 30 SMA. That is asking quite a bit for this market, but hay even a market technician can dream!
Speaking of moving averages; for those looking to add a timing tool to their investing tool kit, try adding the 13 EMA and 30 SMA as shown above. Notice how they crossed way back in November of 2007. If you followed this one tool, you would have been avoided much of the past year's misery in the stock market. While no technical tool works all of the time, this one tool helps in making sure you are not caught on the wrong side of the market. Try it out and I am sure you will be pleased with its results.
That's all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
the-rational-investor.com
Since the market's short term failure two trading weeks ago, our downside target has been a serious test of the July 14th lows at or near $120.02. Considering the significant trend line that exists just below this mark it shouldn't be a surprise to see the market shoot past the 120 level and bounce off the trend line (blue line above). Short term traders ought to consider covering short positions should we trade down to this level.
Regardless, over the medium term, the market continues to forge lower lows and lower highs suggesting we are still very comfortably contained within a bear market. That posture will change with a close above $132 on a weekly basis and a cross of the 13 EMA and the 30 SMA. That is asking quite a bit for this market, but hay even a market technician can dream!
Speaking of moving averages; for those looking to add a timing tool to their investing tool kit, try adding the 13 EMA and 30 SMA as shown above. Notice how they crossed way back in November of 2007. If you followed this one tool, you would have been avoided much of the past year's misery in the stock market. While no technical tool works all of the time, this one tool helps in making sure you are not caught on the wrong side of the market. Try it out and I am sure you will be pleased with its results.
That's all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
the-rational-investor.com
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