bkassul's  Instablog

The resistance targets are close for the Dow and the S&P.

We have witnessed  a long and profitable run since September but we could be getting ready to bounce off of some significant targets in the Dow and the S&P.  The Wizard has a target of  12463 on the Dow and a target of 1357 on the S&P. These are targets that have been forecasting for some time and many did not believe we could get climb this high.  But here we are rapidly approaching them and we  may get there this week. These are our second targets where we take 25% of our original investment out of the market.  Many times when we hit these major targets we will bounce off of them and often test them again.  The result could be a reversal to sell the markets rather than buy them.  The volume is declining  and that is usually a good indication that we are close to a reversal. But remember much of this rise has been with lower volume.

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The truth is we never know how high the market will go, we simply stay with the trend until we get the signal to get out.  Since we have two of our targets we could be getting close to the end of this run.  The one factor that is bothersome to all in the market at this time, is the participation of the Federal Reserve.  They are pumping money into the markets every week and it has continually climbed higher and higher. It will stop at some point and the results could be a severe downturn. So be on alert and be ready to cover your positions if we get a major sell off that triggers a sell signal.

We are still very bullish with Double Green Arrows for long and short term trends in all of the equity markets.  Many stocks and ETFs are making new highs from good earnings reports.  If the Federal Reserve stays active, we also could blow right through these targets.  But I am inclined to think that we might get a bounce off of these strong resistance numbers.

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