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Can Market Get Back to Recent Highs?


Support continues to hold, keeping the market in a 14-week trading range. We now get to see if the market can get back to recent highs, then maybe through resistance.

Do not tell me it is because economic growth is better. Do not tell me it is because Greece is going to get worked out. I thought that was worked out a year ago. For whatever the reasons, support continues to hold, keeping the market in a 14-week trading range. With today's strong open, we now get to see if the market has enough to possibly get back to recent highs... and then maybe through resistance.

In the past, I've reported to you the facts. The major averages were still holding support but while that was going on, many areas were getting in trouble. I gave you support levels that if breached, look out. These levels have now held as the dollar is back to being smoked. It all started when the Fed announced more monopoly money spending. You can time it to the minute. Early last week, the minute the Fed's spending was announced, the dollar swooned,commodities bottomed and the market held. But I do not rationalize why. I care about what is.

While the major averages were about flat last week, a few leading growth names broke to new highs...a decent sign. But that is just a sign. The market needs to follow through and confirm an uptrend.

At the open today, all major averages will be at or back above the all-important 50-day moving average. As I have told you, nothing bad happens when price is above this level. This is on top of the better commodity action in the past week on the back of the weakening dollar. I will be looking for a higher volume day with the major averages being up over 1.5% or more to tell me the market can possibly start a new uptrend. It would be nice. I hate trading ranges. Give me a bull. Give me a bear. Don't give me range-bound action.

Even with today's strong open, the 14-week trading range continues. There is still resistance that major averages need to get through to get the market going again. The good news is that if today's open holds, the ledge will hold for now and if the market has a follow-through day, I will become more emboldened.

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No positions in stocks mentioned.
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