We had a really weird week in that the news from Europe once again dictated everything that happened and when the week was over, I’m not sure anything was resolved. I guess the news gurus will tear it apart over the weekend and we will know Monday morning. We squeaked out a small gain on every index and that is the good news. The bad news is that on Thursday, every index created a pivot high which is an indicator that things will be going down for at least 2-3 days of more. Then came Friday and it seemed that all the bad news from Wednesday and Thursday was gone and most indexes raced back up from 1.55% to 2.50%. What I would pay to have the markets just to move in one direction or the other so I could make some sense of it. Looking at the S&P500 chart above you will see once opened that we did get that Pivot High and it is green which means it was higher than the last. That is great. What we would need next is for the next pivot low to higher than the last and we will not have that answer for at least one more trading days. So only time will tell.
Reading from right to left we have Small Cap, Nasdaq, and the European Index. All three indexes created a pivot high on Thursday and then Friday created a pivot low which reversed the direction from down to up in one day. Pretty awesome feat on the stock market but since things are News Stupid, not surprising to me. I like what I see in these 3 charts but I’m also very cautious that it might be just little bit to soon to put all my faith in them. What’s to say come Monday that all the bad news returns and we step back the other way? Nothing. But putting that claim aside, the charts are saying that it is possible that a strong new uptrend in it’s infant stages are being confirmed by 3 different indexes. The Dow 30 which was the strongest running index all week is not confirming yet. The single most important index to me, the S&P 500 is also not onboard yet, so I have just a little bit of doubt. So what I see we need from the 3 indexes above is this, the Small Cap needs climb and close above $645 next week. The Nasdaq needs to climb above and close above $2675. What would really make this great is if the European Index would climb and close above $51.90. This would help me feel more confident in the markets and make me stay in. Finally we cannot leave out the all important S&P500. The icing on the cake would be for the S&P to climb and close above $1268, and $1278 would be a reason to dance in the street.
Like I have said in the past, no one can predict to the stock market and those that say that they can are blowing smoke up your butt. Believe what you see and read on the charts and remember the news guys are there to create excitement which means in turn, you will watch them and advertisers make money. If they ever start making you money on stock picks, let me know and I will change my tune.
One more thing, if you think this European thing is all done, think again. READ THIS
I will post more percentage updates when TSP post the closing numbers for the week.
TSP Distribution: C-fund 50%, S-fund 50%
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