Faithful blog readers may be wondering why I posted so little this month. Many readers may know that I am also a commercial pilot. I recently was offered the opportunity to assist our local community college in establishing an FAA-approved Part 141 flight school. This has been a monumental task and has commanded virtually all of my free time. As a result, I have had little time to research trades and even less time to write about what trades I have made. I have managed to keep the Portfolio and Trade Results pages updated in nearly real-time. I apologize to my readers for the inability to post more actively. Once things settle down a bit, I hope to get back to weekly posts.
The market certainly started off 2016 with a blow, but appears to be stabilizing somewhat. Even though we have seen wide swings in the S&P 500, this week did end on a huge positive note with the SPX up 46.88 points on Friday. Market activity this week was driven both by earnings and the central banks. The Federal Reserve released its January statement on Wednesday, leaving the door open to the potential of four rate hikes taking place before the end of 2016. Meanwhile, the Bank of Japan took a step in the opposite direction by announcing the introduction of negative interest rates. The SPX opened Monday at 1,906.28 and closed Friday at the high of the week at 1,940.24, up 33.96 or 1.78% for the week.
The chart show strong support at the 1820 level. Despite excursions to these levels twice in 2014 (April and October) as well as earlier in January of this year, the declines have halted at that level. If we are to see a breach of the 1820 level, that would be a strong indication that we are headed into bear market territory.
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