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Despite the doom and gloom of the previous post, technically speaking the markets are still very much bullish in the long term. The monthly charts still show a strong bull market under way while the weekly charts indicate we are in a simply sideways pullback about to start another leg up perhaps to 1400 and above. As you can see from the Daily chart above we are close to confirming a new uptrend with a close above 1339 confirming a higher high and high low pattern that is the definition of a stage 2 markup. A subsequent close above 1344 would indicate the resumption of the uptrend on the weekly chart and align the time frames for further upward movement.
Fundamentally speaking the news coming in is a mixed bag. The market expects positive housing numbers tomorrow, a negative surprise could be damaging. Unemployment continues it’s downtrend from the 2008 peak though that is partially attributed to expiring benefits. Consumer confidence remains low with just reason.
Putting my money where my mouth is I am keeping a bullish outlook for the near future but with strong cautions because of the upcoming political turmoil. This means tighter risk management in the form of tight stops and smaller positions.