Last Monday we got a reminder how silly the stock market can be when news drives the markets. The Ukraine and Russian crisis with the threat of civil war drove the market down hard. Then Tuesday morning it was as if the news never happened and we got all the losses back plus more. It is drama like that which makes some run from the market and sometimes I cannot blame them. If you felt that distress, then maybe watching monthly charts will help you. I to have issues in and around the markets and the one index that frustrates me the most is Bonds. Seems I just cannot find a rhythm or chart that works for me personally. To which I solve by just not investing in Bonds most of the time. Recently I started helping my wife invest her Grandmothers money in order to do better than 1% CD rates she has been receiving for the last few years. I’m teaching her to use the monthly charts, buy or sell once a month and forget it. Well, that’s all fine and dandy, except I watch daily movement and Bonds are at it again.
The International Index above is safe at the moment. Price has been bouncing around in both directions and is very hard for me to read. Price has memory and buyers and sellers look at certain levels as key points to sell and buy. On the daily chart above it is fairly easy to pick that level out but sometimes zooming into daily charts by using minute charts can highlight certain trends and levels, so let’s look at the 30 minute chart.
Look at that! $67.20 is key and if price falls through that point, a downtrend might happen. If price can hold at or above it, a new uptrend might ensue. Problem is that this can go on for sometime and can be frustrating to investors. But it is what we call consolidation of price and it will break. Based on the odds that most consolidation like this takes no longer than 15 trading days, you would have to think next week sometime something is going to happen. My gut say’s up, but I do not make forecast, I follow trends which are established with PAST data. Past, it the key word. So my conclusion here is this. It might be another good opportunity to take a risk and throw money at the I-fund for a break to the upside. Either way, the I-fund is a hold or watch.
Nothing to say about the Small Cap index above except that it appears that a bull flag is forming. It is very early to make that call but the last 3 trading days, the small cap basically traded sideways. I see this as normal behavior when you consider that we have been making highs the last 4 trading days. Prices cannot go up every single day or up every single month. Eventually profits will be taken and or news will drive prices. So for now we sit and watch the action.
The S&P 500 above is the last chart of the day and here is something you will not hear me say very often. Just look at it and admire it, because I really do not see anything to talk about. Ride and watch is the word.
Conclusions. Looks like bonds, based on daily information, is once again a fail. The International could be spooling up for a break out to the upside. If you are invested here I would definitely stay in and if your outside looking in, it might be a good gamble to jump in. Just be advised there is also just as much of a chance to break to the downside. Small Cap and S&P500 are rolling and we will just ride and watch. They are making new highs and or floating sideways and there is nothing to do but watch. Year to date we are all back to green and March is normally a good month, so let’s ride and watch.
Have a great weekend and week ahead.
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