I hope you had a great Halloween. You’d be forgiven for wondering if the market hadn’t gotten a little spooked lately, or worse, if the market hadn’t begun to actually sell off and die.
So where are we at now?
Is this market going to trick you or treat you in the coming weeks?
Let’s take a look…
21 days ago the Midas Legacy Market Trend Alert gave you a ‘thumbs up’, timing a HUGE 100 point rise in the S+P almost to the day, as you can see from this chart below that you could’ve made money from:
Source: Stockcharts.com
Bearing in mind that earnings season seems to be such a mixed bag, the market is showing excellent strength. And after such a rise, it would only be healthy to pause for breath as it now appears to be doing.
But take a look at those trend lines I’ve drawn, and you’ll see something interesting taking place. For months now the S+P has been bouncing in this channel. And look what happened just over a week ago- the S+P broke out of this channel, upwards- a very bullish sign. When a stock or index breaks out of a trend like that, you should pay attention.
But, as you can see, the S+P as I write has pulled back to the top of the old upper trend line. This is very common and a healthy sign AS LONG AS the S+P stays above it, around 1,750. If next a customary bounce occurs, as I suspect it will, the S+P will have truly just broken out to a new, higher level.
The trend is quite clearly up, the S+P has broken out, the market is strong. Barring too many scares in what remains of earnings season, there’s no monsters in the market’s closet that I can see. Perhaps the market itself is the monster, and he’s getting ready to roar.
Best,
Jim.
