A Time Frame for the Up-Move

The market seems to have entered the next upward leg of the small cycles depicted with the blue lines on the first chart below. These cycles last about two months each, bottom to bottom, and the up phase takes about twice as long as the down phase. Since this upward leg started over a week ago, it has further to go. But there is very difficult overhead resistance at the old highs of about 1688 on the S&P 500.

The shorter-term Arms Index moving averages, shown on the second chart, are now quite uninformative and neutral, but the longer-term ones are very overbought, suggesting that this rally may not be able to get the averages into new high ground. Therefore, I do not suggest trying to buy into the move unless you are a very nimble and aggressive trader, and even if you do have the courage and nimbleness, be sure you have protective stops....226 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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