The Week in Review, Whats ahead...

By: Stock Barometer | Sun, Feb 4, 2007
Print Email

2/4/2007 4:57:53 PM

It was another week of market strength, with the S&P and Dow reaching multi-year highs. To put things in perspective, this is the first time in over 30 years the Dow has gone so long without at least a 2% correction! To say the markets are due for a pullback is to say the least an understatement.

To summarize, the markets is in lala land, soothed into indifference by "goldilocks" economic numbers and a supposedly soft landing in the housing market. The problem with such complacency, is that when something negative happens, and it will, BAM, the market will probably make up for lost time -- to the downside -- fast. Cracks are already starting to show around the edges, in sentiment, specifically stocks selling off on good earnings.

I'm attaching a couple of charts that show the S&P 500 (SPX) and NASDAQ 100 (NDX). The charts both tell a story of excess and an over-extended market, but they are also different, in that the NDX has already shown specific signs of crumbling, while the SPX hasn't yet. The trend lines on the oscillators point to similar weakness in the SPX, but the actual index keeps climbing -- it may have a little more to go but not much.

I expect the week ahead to usher in some weakness into the markets. We'll keep you updated!

As always, please email me with any questions, suggestions or comments:



Stock Barometer

Author: Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2004-2017 Investment Research Group, Inc.
d/b/a All Rights Reserved.

All Images, XHTML Renderings, and Source Code Copyright ©