The immediate fork in the road for stocks involves whether we (a) remain in a range between 940 and 1,130 on the S&P 500 or (b) can see a sustainable move above 1,130.
The CCM Bull Market Sustainability Index (BMSI) closed Monday at 1,943, which pushes us closer to the top of the neutral range with bullish territory in sight.
The ongoing and big concern in the current environment is the lack of interest in the markets, as evidenced by lackluster volume, especially on the major ETFs, like SPY, QQQQ, and DIA. The positives, which tell us a break to the upside has better odds than many believe, include good market breadth, improving technicals, and economic data which still points to a double-dip recession as the lower probability outcome.
The market will be looking for any comments related to quantitative easing in the Fed's statement due to be released Tuesday, September 21st at 2:15 p.m. ET. We also have mid-term elections in seven weeks. If the market forecasts significant turnover on November 2nd, it may help push the S&P 500 above 1,130.
The video below covers possible investment contingency plans for S&P 500 levels ranging between 940 and 1,130. The video can be watched "as is" below or you can view it with a larger screen via the YouTube version. If you have a fast internet connection, the YouTube video is a little clearer if you view it in 480p. If you have a slower internet connection, it may be better to watch it in 360p (the default) via the YouTube version.
We have been underwhelmed with the market’s advance in the past few days; we would like to see some convincing participation before we become interested near current levels.
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Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC (CCM). CCM would like to thank StockCharts.com for helping Short Takes create great looking charts.Terms of Use. This article contains the current opinions of the author but not necessarily those of CCM. The opinions are subject to change without notice. This article is distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The charts and comments are not recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations are not predictive of any future market action rather they only demonstrate the opinion of the author as to a range of possibilities going forward. All material presented herein is believed to be reliable but we cannot attest to its accuracy. The information contained herein (including historical prices or values) has been obtained from sources that Ciovacco Capital Management (CCM) considers to be reliable; however, CCM makes no representation as to, or accepts any responsibility or liability for, the accuracy or completeness of the information contained herein or any decision made or action taken by you or any third party in reliance upon the data. Some results are derived using historical estimations from available data. Investment recommendations may change and readers are urged to check with tax and investment advisors before making any investment decisions. Opinions expressed in these reports may change without prior notice. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. The investments discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is not necessarily a guide to future performance. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. All prices and yields contained in this report are subject to change without notice. This information is based on hypothetical assumptions and is intended for illustrative purposes only. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Short Takes is proudly powered by WordPress . Entries (RSS)
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