The stock market of the past week has shown some strength and is close to breaking through a 6 month high. Does this mean it’s time to invest or time to unload. The answer, as often in investing, is it depends. In the short term it looks like there will be enough resistance and shift in momentum to see a pull back in stock prices this coming week.

However in the longer term the moving averages (50 & 200 day) have crossover and are indicating a bullish trend. Once we’ve made it through the correction for short term resistance we can expect that the 6 month highs to be broken and continue higher. This of course also hinges on stable news of the economy. Any significant shift in economic data could spike the index higher or lower. This is where the variability and risk come in to play while investing using technical analysis.

Here’s a video giving a visual of what we’re talking about. Enjoy.

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