AFTER BREAKING BELOW JANUARY LOWS THE MARKETS ARE NOW CHALLENGING THE DECEMBER HIGHS!
Next week, should be an important week for those watching charts. The S&P 500 and the NASDAQ markets have already broken into new high ground above their December highs. It remains to be seen, whether the Dow industrial averages will break into new high ground. There has been a flurry of positive news lately, including good earnings reports, a cease-fire in Ukraine, higher oil prices above $52 a barrel, some accommodations with Greece and indications that the European Central Bank will try to stimulate the economy. I continue to believe that earnings will continue to deteriorate, the Ukraine cease-fire will not hold, oil prices are headed below $45 a barrel, Greece is a problem that will not go away and the stimulus by the Europeans central bank is not enough to turn around a European deflationary scenario. However, if the market breaks above new high ground and holds above that new high ground, the market is telling us it wants to ignore all the bad news AND just go higher. There’s an old saying in the stock market; “The trend is your friend”!
Dow NASDAQ S&P
Current 18,019 4,893 2,096
December High 18,086 4,814 2,092
January High 17,400 4,700 2,013
January Lows 17,147 4,605 1,991
December Low 17,069 4,545 1,973