Stocks Coiled Up for a Move

Good Monday Morning!

If you looked for me on FOX Business last Friday, I wasn’t there as the attack in Germany meant more geopolitical news and less market discussion. My segment was rescheduled for 2:50 pm this Wednesday which is right after the Fed concludes their meeting and announces no change in interest rates.

There’s not a whole lot new today to review. Stocks remain very overbought, but an awful lot of investors are looking for that pullback to buy. Having been in that position more than a few times in my 28 year career, it can be very frustrating. Thankfully, it’s not something I have to worry about right now. I can find other things to bother me!

Heading into the new week, the major stock market indices are “coiled up” as my friend Tiny would say. That means they have traded in a narrow range after a big move and they are building up energy for a good move. The best example of this is with the S&P 400 as you can see below and the Russell 2000.

Coil

While the this coil looks to be very bullish with an upward resolution, given how overbought the stock market is, I would be on the look out for a possible move to the downside first. That could shake out some weak handed holders and then immediately reverse and break out to the upside. All speculation at this point so we will watch it closely.

If you would like to be notified by email when a new post is made here, please sign up HERE.

If you would like to be notified by email when a new post is made here, please sign up HERE

Paul Schatz, President, Heritage Capital
Paul Schatz, President, Heritage Capital
If you have at least $250,000 of investable assets and would like to schedule a complimentary meeting, call, or video conference with me, please click on my calendar here email me at Paul@investfortomorrow.com or call the office directly at 203.389.3553.

Trackbacks

  1. […] proven otherwise. 1-3% are your typical pullbacks during bouts of unusual strength. With stocks coiling up for several weeks, I warned that a fakeout to the downside followed by an immediate move to the […]

  2. […] proven otherwise. 1-3% are your typical pullbacks during bouts of unusual strength. With stocks coiling up for several weeks, I warned that a fakeout to the downside followed by an immediate move to the […]

Speak Your Mind

*