Breakout Imminent? Asks Market Timer Frank Kollar
May 18, 2007 (FinancialWire) (By Frank Kollar)
For the past several weeks, the S&P 500 Index – (SPX) has been on the verge of breaking out to new all-time highs. We wrote about this some weeks back, but here we sit, still about 15 points (1%) from that breakout.
During this time the Nasdaq Composite index (COMPQ) as well as the Russell 2000 Small Cap Index (RUT) have undergone a slow but steady pullback. So what’s next?
A strong economy and full employment will overshadow higher oil and gas prices. An increasingly strong NYSE Advance-Decline line will power the SPX to new highs, carrying both the NDX and RUT to new rally highs. But after the breakout, look out for a sharp correction to pull all the indexes down and correct a hugely overbought stock market. Trend traders should stay with the trend and that trend is, for now, obviously bullish.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
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