I’ve been taking some time off the blog this summer. But I wanted to make a quick comment on that much advertised head and shoulders top on the S&P that got so much attention recently. It was a classic case of not having an edge trading on what everyone can see. I pointed this out on the last post when practically everyone, even people who don’t believe in technical analysis, were pointing out the inevitable and imminent decline in the market. As bearish as I am on the fundamentals and the present leaders in Washington, it is always wise to trade against common wisdom. The neckline of that formation was penetrated, but the re-test back up blasted through the neckline to the upside, and now recent highs from early June are being tested. In the tech-heavy Nasdaq that high has already been taken out. A more bullish pattern is developing on the weekly chart. I’ll try to get a chart up later in the week. A potentially bearish broadening formation might develop on the daily chart is the current swing runs out of energy if it makes new highs, and if it should create a larger impulse move back down. That will be something not as common as the head and shoulders that failed. And this formation is just a possibility at this point. But so far market structure and trends on the indexes are to the upside.
I’m glad to see CIT Group not have to rely on government help, at least at this point. They wanted a hand-out. They apparently didn’t give enough money to the campaign. More likely, the present government doesn’t see much use in small business and didn’t think company that is involved in small business finance as being essential to the economy. On the other hand CIT didn’t have a clear plan when asking for the money. It is good they didn’t get it. Hopefully this will shake them up enough to make an effort to solve their own problems.
I am becoming somewhat optimistic that the public is waking up, that the Kool-Aid is wearing off, and that just maybe Obamunism will fail. It looks like socialized health care is in more trouble with each passing day. And hopefully the cap-and-tax bill, which is perhaps the largest fraud in the entire history of the country, will die in the senate. If so, there is hope for the markets going forward. Perhaps this rally is what the market is beginning to realize.
Sorry for the lack of posts and charts. I’ve been very busy with the Dan Sheridan mentoring program. I’m worn out by the end of the day. I am learning, more accurately re-learning, spreading and income strategies.