Key Takeaway
Okay - We're not tooting our own horn, rather pointing out how the use of technical analysis can be a constructive tool. Looking at last week's Markets 'N5 Episode 38 - "Eye of the Storm", you will see that we added a few blue arrows of what we thought might, or at least could, happen....and it turns out that it's exactly what did happen. Assuming this outcome, we have put a great deal of cash to work amongst our various sleeves in order to capitalize on this recent upswing. The real test for the S&P 500 will be the far right green arrow which points out a major level of resistance (red dotted line). This area will serve as a "true" test of this market and the bulls backing it. Once hitting resistance, it will either pull back down a bit and eventually break through it to the upside, which will be very constructive - possibly even beginning a new up-channel trend, or it will fall back down and create more havoc, where we'll continue to look for attractive entry points (or possibly exit points, if it can't hold). Time will tell and we'll continue to keep you posted on our thoughts and actions through both this blog and our Markets 'N5 show.
