The market closed with modest gains and traded at the best level since 9/1. The move from the low of last week to the intraday high today hit 13.6%. That is an amazing run after the headlines read, "US Stocks in a Bear Market".
Two lessons from this.
1) Do not invest based on the headlines, this is old news and will only have you chasing performance or selling too late.
2) After a 13.6% gain in such a short period off a 52-week low do not chase now. There will be a normal pullback even if the bottom was put in place last week. Patience is a virtue right now.
The S&P 500 hit a high of 1220 today, only 10 points away from significant resistance from from the last day of August. I feel the market is overbought in the short-term and will struggle to get past the resistance area. However, if a big news item out of Europe goes in the favor of the bulls the market will power right through resistance. This is what makes the market so difficult these days. The unknown news can push stocks heavily in one direction or the other.
Right now if you have stocks you have been wanting to sell, now is the time to lighten up and raise cash after the recent rally. Also if you are in the camp that the market has yet to see the lows, now would be the time to enter your hedging positions, whether that is a short ETF or another hedge - do it now!!
Market expert and TV personality Matt McCall blogs about what is really moving the markets. He will emphasize Exchange-Traded Funds (ETFs) and individual stocks throughout the trading day.
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