Here we go again! Sorry, but with a busy week I don't quite have the time to put together a video update but wanted to touch on the markets rally and where we go from here.
I've shown this chart in my last few videos with the horizontal lines being support (when the market has been falling) and resistance (from going higher when it's risen). As I mentioned in my last video I expected the S&P 500 would go as low as 1,270 - which it did on Monday. Also as expected it has used that level as resistance and started rising the last couple of days.
So where do we go from here?
Per the chart you can see we're now directly at another horizontal line - in the neighborhood of 1,310. I would expect that level to be a little tough to break through but it is possible. Should that happen though the the market would be in good order to rise up to 1,340 (or about another 3%). Should it fail, then we'll likely drop right back down to the low for the year.
The markets are always interesting and moving. In times like these I'd suggest not getting too excited or too nervous. A conservative, balanced portfolio should ride through the next few weeks just fine either way. If the market does fail though to get above 1,310 by the end of June my inclination would be to get more conservative and prepare for potentially more downside. We're just not there quite yet - and patience (not panic) is always important in times like these.
Later this week I'll touch on why the market has been moving lower; including my thoughts on the debt crisis in Europe, the economy in the US, and smart ways to be prepared for both the possible good and bad that could result either way.