Here are the 3 keys to more S&P upside
Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of
>The Investors Edge. Mr. Kaltbaum is also the host of the nationally
syndicated radio show “Investors Edge” on over 50 radio stations. If you
would like a free trial to Gary’s Daily Market Alerts
The markets have
attempted new downside levels for the past two weeks. That downside
testing looks to have failed in the near-term…and now the market feels like it
will try to test more upside. But let’s not get crazy. There is just no way of
making more than a short-term call as the action in this market has been
amazing. Just look at the past couple of days…down 150…up 170. Without going
in-depth, the first thing that needs to happen is the S&P NEEDS TO GET ABOVE
1201…AND STICK. That would negate the recent breakdown and get the S&P back
above longer-term moving averages.
I like the FINANCIALS here. They have caught a
bid…on volume…and feel like there will be more upside testing. I know you
are asking how this can be when the Fed is going to raise rates again? I stopped
wondering why a long time ago. Keep in mind, the FINANCIALS are over 20% of the
S&P…so if they can get legs, the S&P will follow suit.
Please do not think this will change all the
damage that has been done over the past couple of months. There are still many
more stocks and sectors in poor technical shape than in good technical shape. I
am just saying that the make up of the indices are helping out and do believe
there could be more upside testing. This is just a near-term call as I will wait
for the market to decide whether it wants to break out of this 20-month range to
the upside or the downside. In any case, stay on your toes…as I suspect we
will get more of the spastic action we have been seeing…not less.
Gary Kaltbaum