As I suspected the weekend was busy in the world of finance. After a very poor Friday the initial thought was the markets would open down majorly today (Futures were down over 1.5% after the markets close on Friday). But sentiment shifted and by this morning the market came out of the gates like a rocket, up over 2%.
By the time the dust settled however, stocks and bonds finished mostly flat for the day. A big buildup that ended up just a dud.
Per the video above there are some very important levels I'm watching in the market right now. If the S&P 500 can break above 1,155 this week or next I think a short term rally could be in store that would recover a good chunk of the last two months losses. If it fails though and drops below 1,050 I fear another 15% decline could be in order.
Considering the S&P finished today at 1,123 a smart investor should be neither pessimistic nor optimistic - just patient. Riding a balanced, but conservative portfolio will have little movement until the trend becomes more clear. Since we are so close to the end of the month I think the likely move will be to the downside. Money managers have a tendency to like their month end reports make them look smarter than they really are. Since it would have looked smart to be in gold (which I also cover in the video) and bonds, and not in stocks - it wouldn't surprise me at all to see stocks getting sold off into month end and gold/bonds being bought into month end.
As always I'll continue to closely watch these key levels and report back to my blog often.