Another start to the week, stocks still seem to want to go up. Much talk about low volume and wait and see, is it a calm before another euro debt dilemma storm? Who knows, but one thing is reasonably certain is that at some stage we will get a move down. If the current upward trend really is strong then a move down would be healthy, at some stage it would find support and the market bulls could come back with fresh firepower to go higher.
For now, the markets seem to be taking baby steps up which are difficult for both traders and investors. Good traders can trade these moves but probably wish for a little more volatility either way. Long term investors are probably reluctant to buy in now after such a good run, but as we know markets and especially individual shares can always go up much higher and often way past the price at which the investor hoped to buy. Even worse, often they don't come back, the opportunity is missed, just another dilemma that Mr Market puts in our way. And when they do come back, it is often because the trend has actually changed, the knife is falling the other way and then the investor is reluctant to catch it, which for the most part is the right strategy, unless you miss the change in trend direction when it finally happens.
Quite often these small moves in the market are an indication of exhaustion in the trend direction and that something has to give either way, often in the opposite direction fairly soon. Time will tell. For now, the UK TechMARK and Eurostoxx index still look bullish as do the US markets. The 20 dma on the TechMARK has been respected since early June. Straight as an arrow upwards. Only the FTSE100 looks more in a consolidation mode. All look pretty much overbought, but such situations can go on for longer than we might expect.
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| FTSE100 |
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| TechMARK |
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| Eurostoxx 50 |
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| Dow 30 |
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| S&P 500 |
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