Special Risk Capital Management LLC

Above Resistance, Close to Previous High October 26, 2019

Oct. 25, 2019 – Well, onward and upward.  The NASDAQ Composite Index closed above resistance indicating strength.  That’s all well and good but the next level of resistance (above) would be 8325, which was the previous high on 7-26-19.  As we approach that level it is logical to expect a pause to digest the previous up move.  Since we’re right in the middle of earnings season there is always the potential for a surprise.  So far the earnings have been pretty good, with some guidance lower in the 4th quarter.  Volume has been average, so no one is rushing to buy.

                                                      (click on chart to enlarge)

For now we just have to go with the flow and watch for signs of weakness.  The support level is near the 8045 mark and any minor correction should hold near there.  If that level breaks we could be in for further downward action and just wind up in a broad trading range.  The good news is that we’re in a generally bullish sessional period as we head into the Christmas session.  Everyone will now begin to watch for consumer / retail spending, and that will weigh heavily on the market over the next 2 months.

On the sector front, the Technology sectors have regained their dominance.  Latin America and Small Cap stocks are also back in trend.

I am nearly back to being fully invested.  Still looking for a few more stocks to fill in the growth portfolio.  Lately my research has focused on “when to sell” to lock in profits during a correction.  Transaction costs are so low there’s no sense in trying to stick it out and be a hero.  The trouble is most growth stocks go down about as fast (or faster) than they go up.  Timing is a big factor.

That’s it for this week.  Have a good week.   …….. Tom  ……

Price chart by MetaStock; table by http://www.HighGrowthStock.com. Used with permission.