Bulls and Bears are watching this chart for signs that the other side is giving up.
Meanwhile, price has been moving within a fairly narrow decision zone.
A look at a daily chart of the S&P 500 Index shows that it recently bounced off the target zone of the recent head-and-shoulders topping pattern (shown by the grey dotted line). Since then, it has made a series of higher lows (marked by green arrow); only to fail at the neckline resistance (marked by the red arrow).
While price has held above recent lows, we have still seen fairly strong selling.
Consequently, traders may expect to see bears push the short side while trading stays beneath resistance. A poke below the early August bottom wouldn't surprise me, and would likely take out a bunch of stops.
Traders whose only investment strategy is to buy stocks may be subjecting themselves to unnecessary risks.
There is always something working in the Markets. So, if you limit yourself to looking solely at U.S. Equities, you might be missing something.
For example, here is a chart (from David Stendahl) comparing the risk and reward of trading various Currencies to the performance of the S&P 500 Index.
Notice that each of these markets recently did better, while also having a very low correlation with the S&P (shown by the big black dot in the lower right of the chart).
The point is that there are many other markets and products you can use to diversify your portfolio and improve your risk-to-reward ratio.
Wherever there is danger, opportunity lurks, and vice versa The two are inseparable ... but they don't have to be equal.
What About the S&P 500?
History doesn't usually repeat itself exactly, but it often rhymes.
Take a look at Bespoke's comparison of the S&P 500's price chart in 2010 to this year's price chart. It is easy to see why people are hoping that we get something even remotely similar to what happened last year.
Here is what Bespoke had to say:
Last year, the S&P 500 made its pre-correction high in late April, and it wasn't until Bernanke's Jackson Hole speech in late August that the market broke out of its summer funk.
As shown above, the S&P 500 also made its pre-correction high in late April of this year, and people are hoping that we made a short-term bottom at the end of August right around the time of this year's Jackson Hole speech.
In 2010, the S&P 500 was down 3.12% on September 1st, and it closed the year up 12.8% after pretty much going straight up over the last four months of the year.
As we enter this September, the S&P currently sits down just under 3%. If history repeats itself, the country will surely end the year in a much better mood than it's in now.
Steve Jobs deserves credit. He is a world-class innovator and showman.
Despite what the cartoon says, there is not an app for that. Replacing Steve Jobs will not be easy. He was one of a kind.
His latest accomplishment is that he figured-out how to get everyone to eulogize him while he's still alive.
Brilliant.
To be fair, these may be the last years (or days) of Jobs' life. But, as HBR points out, if so, Jobs no doubt knew that something needed to change. Perhaps it really is time for Jobs to go home, as he put it, to a "wonderful family" and an "amazing woman" and re-reflect on a few of the provocative questions (slightly altered) that he posed to the world in his 2005 Stanford Commencement Address.
Are you wasting your life "living someone else's?"
Do you "have the courage to follow your heart and intuition?"
Are you nurturing a "great relationship," one that "just gets better and better as the years roll on?"
Do you tell "your kids everything you thought you'd have the next 10 years to tell them in just a few months" or days?
Do you make "sure everything is buttoned up so that it will be as easy as possible for your family" when "the single best invention of Life" takes its toll?
Do you say "your goodbyes" before it's too late to say them?
For almost four decades Steve Jobs has certainly tried his best to "put a ding in the universe."
It Matters that it Matters."Do you want to spend the rest of your life selling sugar water — or do you want to change the world?" That's what Steve famously asked John Sculley. Translation: do you really want to spend your days slaving over work that fails to inspire, on stuff that fail to count, for reasons that fail to touch the soul of anyone?
Do the insanely great."When you're a carpenter making a beautiful chest of drawers, you're not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it." We're awash in a sea of the tedious, the humdrum, the predictable. If your goal is rising head and shoulders above this twisting mass of mediocrity, then it's not enough, anymore, to tack on another 99 features every month and call it "innovation." Just do great work.
Those aren't the only lessons, nor probably the best lessons. There are lots to choose from.
Umair Haque challenges: Steve took on the challenge of proving that the art of enterprise didn't have to culminate in a stagnant pond of unenlightenment — and won. In doing so, he might just have built something approximating the modern world's most dangerously enlightened company. Can you?
What a great thing career he had. He ends his Stanford speech with a quote that sums it up well. "Stay Hungry ... Stay Foolish."
Decision Zone: A Look at the S&P 500 Chart
Bulls and Bears are watching this chart for signs that the other side is giving up.
Meanwhile, price has been moving within a fairly narrow decision zone.
A look at a daily chart of the S&P 500 Index shows that it recently bounced off the target zone of the recent head-and-shoulders topping pattern (shown by the grey dotted line). Since then, it has made a series of higher lows (marked by green arrow); only to fail at the neckline resistance (marked by the red arrow).
While price has held above recent lows, we have still seen fairly strong selling.
The Dow Jones Industrial Average and the NASDAQ both show similar patterns.
Consequently, traders may expect to see bears push the short side while trading stays beneath resistance. A poke below the early August bottom wouldn't surprise me, and would likely take out a bunch of stops.
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