Hello everyone
Just a quick note that things, as I see them, are in my opinion “ops normal” and I am 100% S-Fund in my account. This week, my indications are that the I-Fund outperformed the other funds on a one-week basis, however I am not basing any trading decisions on this one week performance. My data indicates that the S-Fund is the overall July winner (so far).
The indexes are reflecting “cautious” accumulation, in which more money is coming into the market versus money going out, with the NASDAQ (a tech heavy index with many up and coming companies), performing well. I say cautious because July witnessed some down days…large investors are not jumping into the market with both feet. In my opinion some Bernanke nervousness and other things are still in the air, affecting enthusiasm.
My charts of the SP 500 index reflect a potential Cup with Handle pattern forming, which is a pattern discussed by William O’Neil of Investor’s Business Daily, associated with bullish behavior. The particular pattern underway now is NOT a perfect cup with handle, but in my opinion, it is closer to being a Cup with Handle than not being one. Please see images below
Another observation that I have, is that the 1700 level on the SP 500 appears to be our new area of “overhead resistance”. Any activity at, and above this, will make the headlines as this is a new All Time High and the area of resistance. The SP 500 hit 1698 on July 23 and July 24 than cooled off somewhat and came down from those levels. Keep an eye out for 1700.
1670 is our support level and anything at and below this is undesirable. On July 11, the Sp 500 had what I call a “thrust day” where its intra-day performance was much better than the prior days, with the index closing higher than the prior day. This is akin to a person whose max bench press per workout is 200 lbs. For five days he maxes at 200 lbs each day and on Day-6, he is able to magically bench 300. The next few days after that, he is lifting 200, 240, 220, 205. However you now know that 300 is possible. That is what I see in the indexes. Some one-day bursts of strength, a few flat days, another one-day burst, etc etc. The summer months July-Aug-Sept tend to be lackluster, so I am happy to have July’s gains.
With that said, I remain 100% S-Fund in my account. I will update folks as the situation warrants. I ask that if you find this site useful or informative, please pass it to your colleagues and friends.
Thank you
– Bill Pritchard
