US Stocks Fail At Major Resistance
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This process of support turning into resistance (and vice versa) is classic polarity.
We never truly know if the market is going to recognize our principles of polarity, but it usually does, and this time was no different. It's up to us to either take notice or you can choose to ignore it.
Last week we took a look at Financials flirting with significant support. They finally broke down this week.
So what are we doing about it?
Well, that all depends on who you are, your objectives, risk tolerance and time horizon. For us, we're staying disciplined to our key risk levels. We are taking profits when our upside objectives are hit, like $DOCU this week for example.
That's our plan. What else are we doing? We're watching this new resistance from former support in the S&P500 relative to both Gold and US Treasury Bonds.
Gold is working very well for us, so we're all for Gold continuing to rise. Nothing new here...
Bonds have been stuck in a range, but definitely have our attention as US 5-yr Yields just went out at new all-time lows:
In the meantime, we want to be buying stocks that are going up. We're looking for relative strength and positive momentum. These strategies have worked and we will continue to look for isolated opportunities that have the potential to appreciate regardless of what's happening at the stock index level.
Markets are a mess. That hasn't changed. If anything, they got messier this week.
What are you seeing out there? What am I missing here?
JC