Showing posts with label what to buy for 2010. Show all posts
Showing posts with label what to buy for 2010. Show all posts

S&P Peaking

S&P Trends reportAfter a pretty moderate trading day on Friday, Monday looked to open up the week on the downside, that is until the Dow conveniently rallied for over 50 points during the last thirty minutes of trading. The fact that most of this recent rebound from February's lows have been done with mostly really low volume poses a lot of questions, which we'll talk more about later.

We're in a very critical state in the markets right now. We are hovering gently over January's highs, but are not "bursting through", which is usually the case when entering another run up in the markets. The float-like movement would usually indicate that the index is oversold at the point, especially when these technicals were beaten on a Friday, in which markets usually heavily reward new thresholds. However, during trading this past Friday, this was not the case.

The newest free video released from MarketTrends (check it out, a great video), in my opinion, explains the recent movement of the S&P quite well, while also giving some projections of where we might be heading in the near future. Most of you know that I have been expecting a rather strong pullback for a while now, so this is no surprise to me. In fact, China's Premier warned about the possibility of a "double dip" recession, due to financial system's risk as well as increasing unemployment problems. Many of our domestic economists refute this notion, saying the worst is well behind us. We will know who is correct in the next few months.

The US dollar is gaining some strength right now, due to expectations of a change with the Fed. Many are expecting the flow of the dollar to get tightened shortly, as the Fed has made it clear of its intentions to raise rates here in the near term. UUP continues to be performing well for me, however, at this point, I am beginning to look for an exit. You usually get the best of the run during the anticipation of the news.

From watching the video you will see that this week can be a very telling week for markets and should start to show more direction of where we're heading in the long term. Low volume trading is a big condition slowing my desire to trade more at this point, however, that volume cannot stay low for much longer. Happy Trading.

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