Little new to report in this week's Blog entry. The S&P 500 stock index (as measured by the exchange traded fund: SPY) has been steadily moving higher over the past ten weeks. We were issued a new 'trader' buy signal when the market moved above the high of 114.67 on the week of March 8th. 'Investors' were issued a buy signal the first week of May, 2009 which is now almost one year ago (when the 13 EMA crossed back above the 30 SMA).
Upside targets currently are the trading range breakout target of 125.19 (where one takes the old trading range and adds it to the top on a breakout - in this case 114.67 - 104.15 = 10.52 + 114.67 = 125.19) and the highs from August, 2008 at 126.24.
Once these targets are hit I would be very leery about putting any new positions on until a healthy correction/consolidation takes place. Coincidentally, we are just about one month away from our seasonality-peak window for stocks (ie. sell in May and walk away). The fact that these two points are coming together so neatly ought to raise suspicions about how much further this market can go once the seasonal window closes.
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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