Compliments my comrade stock trading warriors. We may well be at the start of a new big bull run.
What?
What am I talking about with so many people being without a job, banks being shut down, and house building taking a double plunge to the downside?
Great question. It does appear ridiculous if you are a one-dimensional organism living in the here and now.
On the contrary you are greater than that. You were created the capacity to imagine yourself trading in the future. That higher level of thinking is what separates you from other beasts and living organisms that can merely exist in the here and now. Although I admit it’s not as cool as Torchwood time travel, it is capable of making you a great deal of money.
One of the most tricky ideas for amateur traders to snatch is that the stock market is the future of the economic cycle somewhere from 3 to 9 months. In other terminology, all the movement happening on the stock market right now is a wager on where we think the economy will be 9 months from now. The stock market is telling us that in 9 months from the present, the unemployment rate will be lower, banks will no longer be failing, and home construction will strengthen. The earnings season we just finished confirmed that with 70% of all corporations posting earnings increases from the second quarter of 2009.
Last week I talked concerning how, with the downtrend channel breakout, we don’t know what new channel or formation will develop since we don’t have adequate chart data thus far. Currently with 1 week more of chart data, and zooming out on the stock chart to look at the larger trend, a configuration springs forth.
The S&P 500 has completed a Bullish Flag breakout.
Now short sellers and gold insects will argue the pattern and proclaim that not enough volume exists for this to be a applicable breakout but that is just not accurate. If you go back and look at the preceding Bullish Flag breakout we had on the S&P 500, you can appreciate that the volume that has accompanied this breakout is over 24% more!
The Bullish Flag did a perfect 38.2% Fibonacci retracement of the bull move that began in March of 2009. A 38.2% retracement is a common retracement for a uptrend.
I am upgrading the Dow, Nasdaq, and S&P 500 to that of uptrend.
Free technical analysis to assist you in establishing the swing direction of the major indices. Go to s & p trend Also published at S & P Trend Upgraded To Uptrend.