WEEKLY MARKET UPDATE

The bulls stampede on!  The week previous the market closed strongly above the all time highs made in September and this past week the market closed even higher.  The market has spoken (see weekly SPY chart).

CONCLUSION

I've pointed out in past posts that if on the most recent decline you recently moved most of your 401-K or IRA portfolio into cash; that a prudent strategy would be to slowly dip your toes back into the water, adding more of your portfolio back into the market as it proves it can move higher.

ANNOUNCEMENT

Sometime in November I am going to be adding a feature whereby I will post actual trades based on a few trading strategies I developed based on the broad market indexes and selected individual stocks and ETF's. I am a firm believer that it is not necessary to have one's funds in the market at all times (even if diversified) to significantly outperform the market.  My goal is to prove that over the long run.  Have a great weekend!

WEEKLY MARKET UPDATE

Wow, what a strong up week!  So much for the news dictating what the market "should" do.  Unless you've been living in a cave you no doubt know the shenanigans going on in Washington.  Logic would tell you when the news is bad and the threat of another US credit downgrade would cause the market to fall.  Instead, the market brushed that off this past week and rallied to all time highs at 174.51 (see weekly spy chart).  The market is now above the September high of 173.60 and appears to be headed even higher.

CONCLUSION

As I've stated ad nauseam in prior posts I would still be a bit cautious about going "all in" if you've been 100% out due to overbought nature of the market.  However, I do think it's prudent to slowly commit more capital as the market proves it can move higher.  This next week is a very critical week as it can either confirm that this week was a true breakout or a false breakout.  More on that next week.  Be blessed and have a great weekend.

WEEKLY MARKET UPDATE

The long term trend remains up.  Just as important, this week the intermediate term trend shifted up as well. Below is a chart of the weekly SPY.  On Monday of this past week the market opened lower than where it closed the previous Friday.  Early in the week the market sold off but beginning on Wednesday the market started to rally and had a very strong up day on Friday of this week to close above last Friday's close.  This is VERY bullish price action and was also confirmed by the sentiment indicator that I look at.

CONCLUSION

Based on this week's price action the high of 173.60 is a high probability target.  However, I think that caution is warranted.  As bullish as this past week's price action was; the market is still very overextended to the up side.  If I were out of the market 100% up until now, I would "dip my toes" back into the market with a small position and then monitor what happens when the September high of 173.60 is reached.  Have a great weekend.

WEEKLY MARKET UPDATE

The long term trend remains up but the intermediate term outlook remains muddy.  On Monday of this week the market opened much lower than where it closed on the previous Friday.  While the market closed higher today than where it opened on Monday, it still closed lower than the previous Friday's close.

CONCLUSION

This last week's price action makes it really difficult to tell which direction the market may take on an intermediate term basis.  I stand by the position that I've taken in recent weeks until the market can prove it can break out to new highs.  By almost every metric I look at the market is overstretched to the up side.  I would tend to be more conservative than aggressive at this juncture.