As anticipated, the broader US stock market and many other world equity markets have broken the recent top of the trading ranges. In the SPY's case, 114.67 was taken out two weeks ago and has moved another 2.5 points higher since. Since our 'investor' signal had remained bullish (that being the relationship between the 13 EMA and the 30 SMA) throughout this latest pull back in price, we continue to look for higher prices as we head into the seasonally strong period of the year for stocks - Spring.
As for targets going forward, with all the talk of government's bringing a halt to bailout programs, my expectations for further gains this calendar year are limited. The charts seem to concur. Currently, I see three significant upside targets that (if hit) represent a maximum of 10% further gain on top of this years already 4.5% rise.
Since we have recently broken a potential top formation, the bears out there will have to wait for another consolidation in price and a further breakdown from there. In other words, no sell signals anywhere just yet.
My hunch is we will take a serious run at the 126 area in the coming weeks...
That's all for this week,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
the-rational-investor.com
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