Wednesday, October 27, 2010

Stocks Open Lower But Close On Their Highs


Stocks opened lower today but managed to close on their highs. My outlook for the stocks market has been bullish as I am looking for a re-test of the year high which was made last April.

The next few months are the most bullish time of the year for stocks which means we may rally into the early part of 2011. November and December have historically been favorable months  for stocks so I will be focusing on the long side of this market in the weeks to come unless the technical picture dramatically changes.

In the above chart I overlayed the 20 day moving average which has done a nice job at containing the pullbacks off of the September low. I will use this average to trade the short term swings in the market but even if this average is violated, I will still look to be buying the dips providing there is a bullish technical signal to enter into a new long position.

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