Six days ago we hit an all time high on the S&P 500. We were overbought and needed a pause or sideways movement in order to work that condition off. It didn’t take long with the news about the budget crisis, “AGAIN”, to bring price back down and finish within 5 cents of our first warning. Yes the CBL is under attack and if we have a bad day Monday, it will fire. On the chart above, you can see that CBL price of $1691.70 and closing price is $1691.75. That’s close. Right now there is nothing to do but watch whether you in or out.
The Small Cap above held up very nicely when compared to the S&P. I will take this sideways movement because it shows strength. Normally the Small Cap would be the index to take it on the chin first because it is more volatile, but that didn’t happen. We should also just sit and watch on the Small Caps.
Even the International hung onto most of it’s recent gains and didn’t fall as you would expect. The support line that I showed last week is holding up and the CBL is safe. I also believe that we should be sitting and watching here.
Bonds did fire a buy signal and confirm in last weeks post. This week it was actually the winning gaining fund. So if you bailed out of the market recently, you would have been very wise to jump here instead of the G. Bonds were up 1/2 percent and appear to be rolling. Just remember when bonds roll, they roll slow in either direction.
Ok, so through all the drama we had on the Budget and the Government sequesters back in play in this week, our indexes held up pretty well. I actually bought 2 stocks for my personal portfolio, so I believe we are ok but even I cannot predict the future. All I can do is read the past and make decisions on that past information.
Monday is the end of the month and if you are a long term investor using the 10 period moving average on a monthly chart, you will need to make decisions Monday night to put into play Tuesday morning. I will do my best to make post reference the monthly charts.
Have a great weekend.
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