Stock Market Bumping Into Resistance
Stock-Markets / Stock Index Trading Aug 16, 2009 - 11:18 AM GMTBy: Angelo_Campione
The market seems to be forming a tight sideways channel in which we are bumping up against resistance. If we are hitting up against resistance, where is support? In looking at the chart below, one could say that the support level is back around the 94 level (or even the 87 level). Where do I think the market is going?
This last week forming a doji is an interesting happening in my mind. I think we will see a bit more to the downside. Yes, I am calling for an end to the rally after only five weeks. Now, I am not saying I expect to see a huge pullback or reversal. What I am saying is that I think we are more likely to see some selling with a continuation sideways. After a few weeks of sideways to slightly down action, I expect to see another very nice advance - possibly even back up to the 135 level.
I know, after reading that, you probably think we will adjust our positions and remove some weighting. Not at this time. All of my indicators are still pointing bullish, so we are going to stay fully bullish.
No new position (see weighting below).
Current Weighting Suggestion:
3/3 in Bullish Leverage
Long Term Investor Buy Signal Alert
Over the past several years, this indicator has predicted several 100-point or more moves in the S&P. There are only 2 to 3 of these signals every year, so they're worth paying attention to. This is an ideal signal for investors to put cash to work following a down move in the market.
A Long Term Investor Buy Signal Alert was issued March 18, 2009. Over the past 4 months, the SPX has moved up around 235 points.
Past Long Term Investor Buy Signals
October 29, 2008 - resulted in an advance of 76 points over 4 days.
July 23, 2008 - resulted in an advance of 34 points over 3 weeks.
Long Term Investor Crash Warning Indicator
This indicator is a variation of the widely published Hindenburg Omen. We'll let you know when we're seeing indications of a potential crash to come. This would be a good time for long term investors to take some money off the table.
This indicator is not coming into play at this point in time.
You can email me with any questions at plus@stockbarometer.com.
Have a great week!
Lynn
To learn more about my Partial Leverage Utilization System, click here. This service is available for $21.95/month or $209/year. To try my service, click here.
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