Watch Out for Downside
The level we had been watching on the upside of the S&P 500 has been 1358. The rise on Monday was just above that, and the best level on Tuesday was again right in that neighborhood. The slight penetration does not constitute a legitimate breakout, to me, since the volume and range were far from enthusiastic. It still looks as though we are in the same trading range and in the process of testing its upper limit. The Federal Reserve's action (actually, lack of action) did nothing to change the situation Wednesday. The subsequent trading suggests that traders had been attempting to discount a better picture than what emerged.
The Arms Index moving averages are overbought enough to suggest some downside from here. Longs from a couple of weeks ago should consider some profit taking. I continue to suggest avoiding the long side and being prepared to go short on any sign of a slide. A return to 1295 and maybe 1265 is very possible...285 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.