It’s been an interesting new year, that’s for sure.
January closed out with an improbable double digit percentage rally in the stock market.
As I’ve said for several weeks now there is no short set up yet – though the past few days price action looks like the bulls are in need of a breather.
As you can see in the chart here of the Emini S&P 500 futures, price bounced off the trendline I drew a few weeks ago.
Also I want to update you on the breakout in crude oil that I told you about a few weeks ago. Take a look at the weekly chart with a bigger perspective.
In the long term crude oil is in a trading range with room for the bulls to move higher.
Initially I’d expect Crude to test 102 and if successful the next resistance I’d expect would be at 114.
In the past I’ve talked a bit about Apple and the media has been obsessed with every twist and turn in that former darling. But now that AAPL looks like a heavy weight champion who’s taken a surprise right hook and can’t get off the ropes the media’s new golden child is Google.
I grabbed a chart of GOOG so you could see the break out to new highs for the search giant.
It seems like yesterday that Google went public with the Dot Com crash still fresh in investors mind. Unlike Facebook that got hammered right out of the gate, Google has risen higher than the naysayers expected and like the stock market in general, is on a helium ride to new heights.
It’s best not to fight the trend, just recall the lesson from the previous two bubbles in stocks over the past 10 years – never forget nothing goes up forever and balloons aren’t pretty when they pop.
David K. Miller
Managing Editor, Absolute Wealth