We’re probably pretty close to another buy point on the markets–the S&P is approaching its trendline, and stochastics (a very near-term indicator) is approaching oversold. You might want to wait for the “weakest seasonl period” to end (Brooke Thackray tells us ist around the 9th of October on average) if you are considering buying–there may be a little bit left to sell off. But the S&P remains above its 50 & 200 day MA – a bullish sign overall.
Longer term–My 2 cents worth for the winter is for a top to appear (if it didn’t already happen on September 21st at around 1467) on the markets in the next month or few months. My upside target for the SPX remains at or near 1500-1550. Prior market tops near that level in 2000 and 2008 formed complex topping patterns with peaks spread several months apart. Thus, a choppy winter and spring with another test of the highs could evolve. Winter can be a bullish time to invest from a seasonal perspective. Thus, if I am correct about a market high point in the coming month(s), that does not suggest a bearish winter. During the formation of a complex top (i.e. double, triple, rounded, head & shoulder tops etc) there can be plenty of trading opportunities that present themselves. Sector rotation can become a dominant theme. I am preparing to rotate through various sectors as their technical profiles appear favourable. Expect plenty of trading commentary on this blog as these opportunities appear.
By the way–please be sure to tune in this Friday at 6PM for my Market Call Tonight appearance on BNN television. Start the holiday weekend off with some technical analysis!
