Weekly update, October 9th

Back from vacation and back to my weekly updates. I must admit that vacation was nice and I didn’t mind at all not showing up for my regular job. The one thing that it clarified for me is that I’m addicted to the stock market and more than ever I want do this when I retire full time.

Well since September 1, 2010 the S&P has been on a steady climb off the major support point of 104 on the SPY and 1045 on the S&P500. All indicators are pointing and saying to move back into the market. We broke resistance at 113.20 and are currently in the process of breaking though and holding above 115.14. Now 115.14 to 122.12 should show little if no resistance whatsoever.

Here is my only concern as a technical trader, Supply and demand.  In order to have a health climb to higher prices there has to be demand or in the case of the stock market, volume. Open my charts weekly and daily and look at the highlighted boxes that correlate to two areas that showed rising prices. The last was February through April and the current rise. Compare the volume is both situations. Do you see my concern?

What to draw from this? Just be careful putting all your ducks in one pond. Start watching closely for major volume increases and let’s see which way the market goes. My hope starting next week is that volume will increase and prices will rise since 115.12 has been broken. Worst thing that could happen is that volume increases and we start to fall. If that happens, what was resistance is now support and we should ladder back down to each previous level broken. The market needs a bit of consolidation or pull back to keep a healthy move forward, so a small pullback will not be harmful.

As far as my retirement account goes, I am not losing a dime sitting in the G-fund and no matter what the market does, I can’t get hurt. If the market goes zooming, I guess you could say an opportunity lost, but I’m comfortable here. I personally would like to see more conviction with volume. That does not mean I will not trade stocks in my personal account and ride the wave in either direction, as you can tell by my blog, I’m currently very active.

TSP distribution: G-fund 100%