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The S & P 500 and its proxy ETF, the S & P SPDR ETF (NYSE: SPY), are approaching a major decision point.
Chart Courtesy of StockCharts.com
875 on the the S & P 500 and the 87.50 area on SPY will likely tell the tale of this rally.
At some point, in every market, momentum takes over. And that's where stocks are at this moment, very near the point where buying begets more buying, because buyers want to buy stocks, and for no other reason.
In other words, at this point, it's all technical. We're on the verge of eclipsing a significant resistance level, at a time when lots of investors have missed a 20% percent move off the bottom.
That means that there is pent up demand for stocks. And once the cat's out of the bag, it will likely take a while for the trend to turn lower.
Is it guaranteed? Nothing is. Yet, a move above 875 on the S & P 500 is likely to lead to significantly higher prices in the short term.
We are currently long the S & P 500, as well as having put on other ETF long positions. As things develop, we hope to find more individual stocks to add to our lists. But for now, ETFs seem to be the way to go.
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Doctor Joe Duarte's Market I.Q., offers subscribers a unique blend of intelligence, market commentary and trading strategy. Duarte's daily articles, and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Doctor Duarte is a writer, and an emerging futurist, with a diverse background, and a growing audience. His combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.
He is the author of four books: "Futures And Options For Dummies," "Successful Energy Sector Investing," "Successful Biotech Investing" and co-author of "After-Hours Trading Made Easy."
In early 2001 Dr. Duarte in "Successful Energy Sector Investing," correctly predicted that Venezuela's political problems could lead to an energy crisis in the United States.
In 2003, also Dr. Duarte was among the first to widely publicize the long-term friendship between French President Jacques Chirac and Saddam Hussein.
He has also appeared as a weekly guest on Market Mavens Radio, has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.
One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990.
His articles and commentary have been featured on CBS Marketwatch, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines.
In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
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