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Fall Back to Previous High July 29, 2017

Posted by Tom in Thoughts.
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July 28, 2017 – About noon on Thursday a couple of stock analysts decided to downgrade a few tech stocks; and that was it.  Caution set in with a broad market dip, then the computers stepped in to sell, followed by “resting” (in the market)  stops being hit.  Friday was a tight range day holding on to price levels.  I found it interesting that the Index stopped falling right near the previous high (red circle), adding to the adage “what is resistance once broken, becomes support”.

And so it goes.  If this market is to remain strong, this current price level is a logical place to stop and hold.  The next level down is 6164, but that would certainly be considered much more serious, and we could see some serious selling hit the markets.

For the time being I’m patiently holding my longs in growth stocks but watching for signs of continued weakness; we’re overdue for a +10% correction IMHO.  In the mean time I note that the other indicators above remain positive so this appears to be a shallow correction . . . more like a blip.

Where I am seeing strength is in China, Emerging Markets, Latin America, Internet & Biotech sectors.  Telecom and Technology are not far behind.

That’s it for now, have a good week.     ……… Tom ……..

Chart by MetaStock, used with permission.


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