As illustrated in our last Markets 'N5 Video (Make or Break
), I discussed the difficulty for the market to break out of it's nearly year-long, down-channel trend. Again, once a resistance (or support) line gets touched more than 2 or 3 times, the more importance it ultimately holds, and the more respect traders (and profit takers) give it. So far, it appears that the S&P 500 wave has crested. The RSI seems to be rolling over while the MACD is at the early stages of crossing over, all while the down-channel trend line clearly held up as solid resistance. The pull down thus far has broken the rising wedge (typically viewed as a reversal pattern if broken), while breaking back below its 200 & 20 Day Moving Averages (DMA). So as you can imagine, we've lightened the load within our portfolio sleeves this week. We will patiently wait for the signs of our next leg up - maybe a "Santa Claus Rally" in 2-3 weeks can turn things around..!
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