Last week, the market did a mini run to the upside reaching its ceiling. There’s still a tiny little space for the to stretch the ceiling a little further if the market wants to do so. Let’s take a look at the charts.
The weekly chart remains on an uptrend. But prices are very close to its ceiling (Dow: 14271; S&P: 1420). At that point, the market will demonstrate to us if they wish to go higher or take a break.
The daily chart tells me that the price is in the overbought zone. However, the market does not look like it wants to go down. Every time it pulls back, the price will rally away from its low.
Both the weekly and daily is still in down trend. But both are showing sign of oversold. The daily chart is nearing previous low. At that price level, it might provide better sense of how the market is looking to react.
Summary:
Mid term view: Market is still on the upside. It’s either you continue to ride the trend or stand aside.
Short term view: The market near its high. It has been my practice to not buy when it is HIGH. The market might break new high and start another leg of up run with the less disappointing earnings. But it looks like a possible double top on the charts. I believe in the saying, what matters is not the money that you did not make, but the money that you did not lose.
