To steal a phrase from the eloquent baseball legend Yogi Berra "It’s Deja vue all over again". The stock market is just where we left it from last week, currently straddling the key moving averages with a bigger and more ominous rising wedge pattern. The difference now is that the economic reports coming this week have been consistently lousy, a sea change from reports that had been forth coming all year. It begs the question; did we just hit an economic iceberg? Is this bull market about to plunge?
As we had anticipated and pointed out in last week’s video, the markets are not stable at these levels and were expecting some fireworks, which we got on Tuesday with the Dow up over 200. Earnings reports have been all over the map and those who were long Tempurpedic (TPX) will not get a restful weekend as this hot stock missed earnings targets and dropped over 20% Friday.
Speaking of not getting rest, those long AAPL have had to endure nosebleed volatility and the effects of Newtonian physics. Many market leaders such as IBM, AAPL, and GOOG have been hit hard during this recent drop and are additional causes of concern. We need to regain our footing here quickly for us to keep the faith in this bull.
Watch this week’s video for the inflection point’s that will determine the next big move...
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