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Tuesday, July 9, 2013

Those Who Bet Against the Bull Now May be Sorry

Image representing Intel as depicted in CrunchBase
Image via CrunchBase
The major indices closed above their 50-day moving averages and gave strong buy signals

A lagging technology sector, driven lower by a 3.62% plunge inIntel (INTC), lost 0.1%. But money flowing from bond sales continued to drive stocks higher rather than earnings since some analysts estimate that over half of the S&P 500′s companies will miss their Q2 forecasts.
At Monday’s close, the Dow Jones Industrial Average had gained 89 points at 15,225, the S&P 500 rose 9 points to 1,640, and the Nasdaq gained 5 points to 3,485. The NYSE traded 906 million shares and the Nasdaq crossed 396 million. Advancers outpaced decliners on the Big Board by 1.6-to-1, and on the Nasdaq, advancers were ahead by 1.3-to-1.

Chart Key
Each of the major indices has closed above its 50-day moving average and received a strong buy signal from its MACD.
Conclusion: The bulls are in charge of the market despite some technicians’ continued complaints of low volume, narrow breadth, etc. I was surprised to read that one noted and highly respected analyst is predicting a double-top between S&P 1,650 and the May 22 intraday high of 1,687.18.
But I was also reminded of Joe Granville’s warning that to act on a formation before it is executed is the most common mistake of technicians. And our readers have seen me say that to anticipate a formation is gambling against the trend.
The trend always takes precedence, and it is up until proven otherwise.
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