The SP500 index is at 1303.51, just barely above the breakout number of (and write this one down) 1302.67. It needs to close above there and keep moving for this last breakout to hold. The question is whether the ice holds today.
Remember that the prior breakout before this one above the second wedge that is shown in the chart in my free SP500 tracking newsletter (see below) failed initially. So this breakout may fail as well. I’m not saying that it must. I am telling you what number I am watching. Since I started typing this the SP500 has moved up a bit to 1305.71, so the ice is a bit thicker than at the open! Oops! Just as I was about to publish this, the SP500 has dropped to 1303.21. Thin ice can hold of course as the market retests the breakout point. 1302.67 is the number I will follow today.
When I advised that you might lighten up on stocks over the past few days, I laid out the options. You can sell into strength or wait for a fall of a certain magnitude to move out of the way during a correction. Or you can even ride it out. Just don’t ride out the big ones! Set some sort of stop and scale out in stages if you prefer. Since we are still above the breakout point, using a trailing stop may work out better than deciding that the market will fail right here. If you don’t know what the “trailing stop” is, please see my webpage on the main SunAndStormInvesting.com site labeled “Buying Checklist.” You must know where you will sell when you buy!
By the way, my SP500 tracking newsletter is out this weekend and its FREE, so please subscribe below if you are concerned about where the stock market may go from here:
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