Here is a weekly chart of the S&P 500 …
Note that the index is testing the uptrend that has been in place for the year. A breakdown from here could send the S&P 500 to test support at 885. Even if it doesn’t break down, there is strong overhead resistance from a big downtrend. That should put the brakes on a rally for a while. The S&P 500 is being squee-ee-eezed between the two trends, and has to resolve one way or another. Right now, the bigger risk is to the downside.
Does this chart have to play out as I’ve explained here? No. But you can see why traders are more eager to grab gains under the circumstances. We’ve taken some trades off the table in both Red-Hot Commodity ETFs and Red-Hot Global Small-Caps, and we may take more.
Then again, this market could turn around and bolt higher. It rarely does what you expect.
With that in mind, here is some commentary from one of the market’s sharpest minds …
5 Factors Making Barry Ritholz More Cautious on the Markets
1) Over the past 4 days, we have had 3 failed rallies;
2) The number of New Highs on the major indices is contracting;
3) Stocks seem to be reacting far less enthusiastically to earnings beats then they had been;
4) The Transports have been acting squirrelly lately;
5) The S&P is forming an Ascending Wedge.
Barry notes that he has been pretty bullish throughout much of the market rally.
Now, here is some other news and commentary that I’m reading. You might find it interesting, too.
All empires end, and the warning signs of American decline seem to be blinking more consistently.
Big Drop In US Consumer Confidence
US consumer confidence deteriorated sharply in October as continuing weakness in the job outweighed modest improvements in the housing sector. The Conference Board’s confidence index dived to 47.7 this month from 53.4 in September, the biggest drop in eight months. The report was unequivocally weak, with the expectations index plunging to 65.7 from 73.7. The proportion of respondents saying jobs were hard to get rose to 49.6% from 47%.
Want Recovery? History Says Be Patient. Very Patient.
Take a long enough perspective, and it is no surprise that what some had been calling the GGBAT (the Greatest Global Boom of All Time) ended with the GGRSGD (the Greatest Global Recession Since the Great Depression). Both the boom and its panicky finale fit neatly into a long, human tradition of greed, self-deception and financial folly. And, never mind the Dow at 10,000. Eight centuries of history suggest the GGRSGD is a long way from over.
How to Be a Catch in the Post-50 Job Pool
XX Sean’s note – the ideas in the article seemed to be pretty basic, but there was a good note in the comments …
A basic skill 50+ workers need is to be internet literate including with respect to social media applications like Facebook, Twitter, YouTube,Linked In and so on. More and more companies and workers are using these sites to and apps to transact business, find new workers etc. The generations below you are conversant in these areas so you must be too in order to prolong your value and ability to contribute. This is especially the case if you are involved in the continuum of marketing roles (sales, advertising, media, promotion,PR, brand or product management, marketing planning).
And Jesse, as usual, is an excellent read …
The US Dollar Rally of 2008: The Consequence of a Bull Market in Fraud
It implies rather strongly that those looking for a repeat of the sharp dollar rally from last year are very likely to be sadly disappointed. This was no flight to safety; this was the consequence of a massive fraud in dollar denominated financial assets having been sold to gullible foreign investors and their banks. Note too that the eurodollar positions do NOT account for the dollar rally in 2006. This is what was expected, because there was no corresponding spike in LIBOR to indicate a squeeze. Rather, that earlier dollar rally was due to foreign investment in US equities and financial assets at the height of the post tech crash Dollar Assets Bubble.
XX Sean’s note — Have a good Wednesday
Related Posts
- 3 Charts as Mister Market Aims Higher (04/30/09)
- Soros: We’re Still in a Bear Market Rally (05/09/08)
- New Video Transcript: Massive Decline or Market ‘Melt-Up’? (09/01/09)
- New Video — 3 Ways to Beat the Market (05/13/09)
- No Market for Old Men (10/02/08)
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