From: Fallondpicks.com


There was not too much we could take from the last two days of market action. A big sell off was unlikely during the holiday period (barring a major world event) so the coming Monday/Tuesday's action should set a course for the markets into Christmas. Markets are in need of a pullback and their respective 20-day MAs looks the most logical place for support. It remains a traders market - buying-to-hold at these levels remains a risky venture. Commodity-based stocks (energy and precious metals) will likely provide the best long term (investment) opportunities, although commodity prices, like general equity markets, are close to completing a 4-year bullish cycle. Whether markets enter the next 4-year bearish cycle with a strong downtrend, or (more likely) further sideways action with a bearish bias will depend on the future health of the global economy.

At least for now there is no immediate reason to sell; technicals as measured by the MACD, on-balance-volume, ADX, and slow stochastics remain bullish, and the secondary technical indicators [$NASI, $NAA50 and $BPCOMPQ] are holding a bullish bias; 2006 could be an interesting year.

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