Goldfever54's  Instablog

The U.S. stock market is possibly showing a failed double top. There are many headwinds facing the U.S. markets over the next couple months and we are entering what is expected to be a weak earnings period. Additionally investors are becoming complacent as seen by the low VIX. We may expect a short term retractment in the SPY of between 3% to 5% over the next couple weeks.

If corporate earnings fail to meet expectations and the VIX moves higher we might see a larger correction in SPY in the neighborhood of 8%. This would represent a Fibonacci retractment of 61.8% of the move from the June 4th low to the September 15th highs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: This information should not be considered a recommendation and investors should consult their own investment adviser before making an investment decision.

Mid-Cap stocks are like the middle child in a family, they often feel left out. However this sector of the market has outperformed both large and small cap securities over the past 5 years. While most advisors associate them with higher risk over the larger brother SPY investing in an index like MDY has shown them to hold up comparatively well even during the worst of the great recession. I believe this sector should has shown its value during the past 5 years as an important part of a diversified portfolio. Often investors give too light of a weighting to this sector of the market.

Disclosure: I am long MDY.

Additional disclosure: Every investor should consult their own adviser to determine suitability for their risk tolerance. Mark Harris is a Registered Investment Adviser.