Sunday, February 23, 2014

Inflation And The Fear Of Rising Interest Rates


Generally speaking, governments across the globe, including our own government, under measure inflation.   The primary reason is to keep the currency strong and secondly to continue a dovish monetary policy in order to promote a higher growth rate for the economy.  After almost five years of stimulating the global economy, central banks would not mind seeing some inflation and would not hesitate to increase interest rates slightly.  That would be bullish for equity markets.  Recent examples of those periods are early to mid 80's, late 90's and 2003 to 2007.  The reason is quite simple.  In an inflationary and rising interest rate environment, worse place for investment is cash and the worst is bonds.  The better place for investment is commodities and the best is equities.  Fear of increasing interest rates initially causes a drop in equities which would be a fantastic buying opportunity.

This coming week is critical for bulls.  All major indices show bull flags on their daily charts.  Chances are good that all major indices rally to new all time highs later in the week.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
on

Saturday, February 15, 2014

Indices To Hit New All Time Highs Early Next Week



After a minor sell off around 1800 (triple resistance region), SPX easily advanced higher last week.  Big Money was busy adding more long positions at he manipulated cash indices via their future contracts to shake down weak hands.  Per my plan, I followed Big Money and did my 3rd buy of RTS stocks.

Indices are on their way to make new all time highs.  NAZ hit a new post dot com high on Friday and other major indices closed near their all time highs.  Chances are excellent now that we would see all major indices put in new all time highs early next week.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
on

Sunday, February 9, 2014

Indices Are Up Against Stiff Resistance




The rally last week was impressive.  Indices are coming up against stiff resistance.  It's critical that indices easily cut through immediate resistance and push upward to set new highs soon.

For SPX, 1800 to 1810 region presents triple resistance.  After tagging 1810, very likely tomorrow, chances are good that SPX would get pushed down to back test 1800.  My plan to do my 3rd buy of RTS stocks as SPX back test 1800, possibly later in the week.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
on

Saturday, February 1, 2014

Critial Support at SPX 1770 Must Hold

RTS is Selling BIDU and Buying ALXN in its place on Monday 2/3/2014

Indices Long Term Current and Past Portfolios
Updated for buys on 1/31/2014



So far the sell off has been nothing more than a garden variety profit taking pull back in a powerful bull market.  There is a critical support at 1770 for SPX.  Chances are good SPX retests that support on Monday and then rallies to a strong resistance (triple resistance, shown by orange circle) around 1800, possibly by Tuesday or Wednesday.

Possible Senarrios for this coming week:
  • (A) Bearish Case (20%): A close below SPX 1770 would signal more selling to test Primary Uptrend Line (PUL) around 1750.  A close below PUL would be bearish and would signal a test of 200 D-SMA. 

  • (B) Bullish Case (80%): Support at 1770 holds, SPX rallies and closes above its 50 and 20 D-SMA.  Rally continues to Primary Downtrend Line (PDL).   A close above PDL would signal new all time highs for all major indices.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
on
Subscribe to: Posts (Atom)