Another strong weekly close has been elected by the Dow bulls and we have approached some key overhead resistance.
The market has closed strongly through 17,800 and now eyes 18,000. Support above 18,000 and we would likely see clear-blue-skies for the equity markets again.
Love it, or hate it, I have written on the subject recently to give some ideas: http://seekingalpha.com/article/2634995-equity-bears-still-dont-get-it
I still don't think we have seen the 'blow-off' style top that accompanies bull markets like this, although, as the NASDAQ approaches it's all-time high I may be proved wrong. There is still the option that if sovereign debt contagion was to happen through Russia, Venezuela, emerging markets, Japan, Europe (large list) then tech may be shunned for 'bellweather' industrial stocks. We watch and wait.
If you think this action is crazy on stocks, understand that markets have exhibited the same types of insanity for over a hundred years or more. Psychology takes over from fundamentals until the top. We will however look back one day and see where the inflection points were. Until then, you have to stay with the trend.
'Don't fight the Fed' but protect the downside on longs.
Crude Oil has put in a promising bullish close this week and may stabilize/rally from here. Obvious target is to clear $60 and test $70.
I'm still wary of the $40 level but in my previous posts you'll see I talk about price action. Rallies happen in the middle of a basing setup. Market feeling for its lows.
A disappointing close for gold, with a bearish candle on the week and failure at $1200. This can all change rapidly in such a risky global economy and as the Dow reaches strong overhead resistance, it wouldn't be a surprise to see a top in stocks, rally in gold and oil.
On a portfolio basis, I am looking at oil ETFs and strong balance sheet oil/energy plays that have been unfairly dragged down.
Exxon for example, can be bought around 11-times earnings against Facebook's 70-times. No contest.
I will continue to look for a bottom in gold to test the highs but may come mid-2015.
If I see support on S&P or Dow then I might play ETFs with futures exposure incase of blow-off top mentioned above.
Good luck trading and please buy my book, advertised on the left to build the investment skills that I try to share here.