Let’s keep it simple today, shall we? Never mind, I always keep it pretty simple. I am not into complexity for the sake of complexity, especially when it comes to the market. There is more than enough stuff out there that places the market in a confounding and confusing space.
- The S&P 500 cracked a key ceiling, and now that it has, the odds favor a pretty good rally unfurling here. Though it’s unlikely we’ll see a straight-line move to wherever we’re going to hit our next major high, I can see Friday’s jolt putting the market on a track that carries it higher through the end of January.
The above is pretty simple, right? The market has passed certain resistance points on a chart and that leads the writer to believe the market is going higher, for at least a month more. I don’t know if the mild prediction above is true based on a chart, but I do know it is likely based on my understanding of the economic fundamentals. Nevertheless, the writer does believe the market will move based on a chart and here is why.
- Our chart of the S&P 500 (immediately below, as always) speaks for itself. The index punched through the resistance at 1812, and then went on to put some serious pressure on the upper Bollinger band around 1823. The bears might push back a little next week or the week after that, but the hard work’s been done – the hurdle’s been cleared.
The tailwind is the improving disposition of the US consumer, as well as all the other positive economic fundamentals that have been reported as of late.
This week is a light week for the market, no doubt, but the fact that it is up strongly today suggests a good Christmas/holiday season for the market. I like that. I want to have a good week, season, year, life – oops! My simple enthusiasm carried me away there.
Anyway, this is a short week, so in that spirit, I will end now with a factoid that I find all too amusing, given what we just went through in 2008.
- Today is the 100th anniversary of President Woodrow Wilson signing the Federal Reserve Act, which led to the establishment of the central bank. “The law sought to end bank failures by creating a central banking system,” writes John Phelan in the WSJ.
Enjoy your Monday and your week. Oh, and don’t work too hard, you have earned some down time with family and friends.
Trade in the day; Invest in your life …
