Local Top Put in But Bulls are Having Their Way Now...
11/29/2006 5:51:00 PM
We correctly pointed out a local top, but it appears the market may not be done with this uptrend. GDP was revised upward from 1.6 to 2.2. Economists had expected a 1.8 figure. GDP was expected to be about 2.0 for 2007, so this would indicate better than expected growth.
This seems to have provided the bulls with the necessary confidence to rally the markets once again from the support of the 4.5 month old uptrend line. The prospect of shorting the market is daunting at this time, as the S&P-500 has regained the losses it suffered on Monday, although the Dow and the NASDAQ still have catching up to do.
The Russell 2000 ETF (Amex:IWM) reached resistance and fell back. If the other major indexes copy this pattern and move up tomorrow only to be turned back downward, then we may once again consider shorting. Otherwise, we have to go with what the market gives us.
We were stopped out of our position in SWKS and it is now two cents over the stop price. We will look for new opportunities rather than chase this one, although if you still own it, you might want to hold onto it as it has regained the support of its 20-day moving average with a nice reversal candle yesterday.
Please feel free to send emails with any questions you may have.
Regards and Good Trading,