By: Scott Redler
Let’s see if this economy will perform without the Stimulus. Last night’s somewhat surprise discount rate increase will throw some in a tail spin–and, it will give us “new headlines to trade against.” It’s time for some tough medicine across the board. Let’s change this mantra of bailouts around the world to some “tough love.” Something we are finally starting to see.
Now it’s time to see how the market handles this news.
No matter what we were overbought, considering that we just went from 1,044-1,110ish in two weeks. We retraced over 61.2% of that 9% correction off of highs. So, some weakness or corrective type action (AS I STATED YESTERDAY) would make sense.
We need to see where this market holds–and if it holds higher. If the market proves to hold, we can see some additional upside in the future. I would love to see a pull-in to test the break of that descending channel (around 1,080-1,085). That’s where I would take a very close look at the market’s composure and try to get back into some longs.
You plan your work and work your plan. With that in mind, I put together this forward looking chart of the S&P in anticipation of what to look for next. Click on the chart for a closer look at the details.
Hope everyone has a great weekend!
