We're Back to a Support Level
The 1295 level in the S&P 500 that we had been watching failed miserably on Friday. As would be expected, once broken, it opened the way for a large slide. Now, though, the decline has taken the average all the way to the next support level. Back in December, the rally was turned back at 1268, making it a likely support on a decline. That is just about where we went yesterday, before some holding action emerged.
The Arms Index is now somewhat oversold, as we see on the second chart below. Consequently, a rally in here is likely. But the recent weakness is such that I continue to advise not trying to play a countertrend rally here. Ideally I would like to see a good rally and then a test of the low before I would be willing to go long, even on a speculative basis....289 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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