The ShareHunter ‘Momentum Index’ has, for several weeks now, accurately signalled that the potential for higher prices remains limited. And that continues to be our main message – although we must observe that the dominant trend of the markets is upward and so higher prices will, eventually, occur if that trend holds good.
We are now centrering our attention on the S&P 500 Index. This has continued to hit its head on the 1111/1122 area of resistance and there will be no significant general increase in share prices – on any major market index – until the S&P can get, and stay, above that level. Once it does manage to close above 1122 then we can expect some fast moves up the price scale in both US and UK stock prices.
But there remains the always present danger of a sharp selloff whilst the S&P remains below the resistance. The longer it stays under 1111/1122 the greater becomes the risk, and liklihood, of a major price correction. Thankfully, last week’s ‘sandstorm’ in Dubai does not look likely to have too much of an adverse effect on the major markets and may be no more than a relatively minor hiccup in the general movement of stock prices (remember, the dominant trend is upwards).
The fund managers, who have to consider their performance statistics come 31st December will move heavily to prevent any major selloff during the last 4 weeks of this year but that does rather leave early 2010 as looking cold and vulnerable (very vulnerable if the S&P 500 is still below that resistance and our Momentum Index hasn’t pointed upwards!).
Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/
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