Sunday, September 26, 2010

Stocks Close The Week At Their Highs

What a difference a day makes!  On Thursday it was looking as if the market failed above the breakout level but by Friday's close the bulls were back in full force. Stocks closed the week at their highs and well above the breakout level.

I'm having mixed feeling about the market because history has taught us to be very cautious about buying stocks in the September/October time frame due to seasonal weakness but when we look at the current price action, we see a different story. In my opinion the stock market has put in a significant bottom based on the inverse head and shoulders pattern that has been confirmed last week.

One other point I''d like to talk about is that the 4 year cycle is due around now which means a significant buying opportunity is upon us. Whether or not the bottom is in still remains to be seen but based on what I am seeing take place right now, I am going to have to be a bull and play this market from the long side. I'm in!

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