Technical patterns

The S&P 500 broke decisively through the 1120 resistance level (click on the chart to enlarge it).

It could be an important change in the momentum for the market. The bank index has also shown signs of life. But volume was low. Usually, important breaks take place with strong and above average volume.

Stocks could keep rising with low volume, however. Then, as in April, volume will pick up and the market reach a top.

This is a typical pattern. Important bottoms and tops are flagged by above average volume.

IWM, the Russell 200 index of small cap stocks, is still below the June and July peaks in spite of today 2.78% gain.

As usual, we will follow these developments with our proprietary indicators in The Peter Dag Portfolio.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked best market timer in the 12 and 6 months ending 8/20/10 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

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