By Dominic Picarda.
It’s late October, a giant storm is brewing in southern England, and the stock market has been bubbly all year. Despite the striking parallels with 1987, I do not think that equities are just about to get blown to smithereens, as they were all those years ago. The present rally since earlier this month may only be in its middle stages, by my reckoning. The trend is strong and the money-for-free is still gushing out of the Federal Reserve. I therefore keep faith the indices going into the new week, and seek to buy any little intraday dips.
The next update will be on Wednesday 28 October.
S&P 500
Friday: “The near-term objective is still 1767.5… I’d buy a bounce of the 21 fourhourly EMA.” Things have played out as I was expecting and I reckon there is further upside to come here. The S&P isn’t yet overbought on its daily chart, so there’s scope for more gains. I am seeking 1782.1.
Support: 1740.7– Resistance: 1807.2
Support: 1723.7 – Resistance: 1797.2
Support: 1695.6 – Resistance: 1782.1
Support: 1687.2– Resistance: 1767.1
DAY: I’d buy a bounce off the 13-fourhourly EMA.
POSITION: Stay long.
Dominic Picarda CFA, CMT writes the Trader column at http://www.investorschronicle.co.uk/comment/the-trader
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