This past week we saw the overall stock market engaged in a see-saw action with no real conviction. Many market watchers are expecting the market to sell off as we get into the summer season. The market has been showing signs of being overbought and has encountered resistance around Dow 8500.
The above chart illustrates what appears to be a consolidation pattern in the Banking Index (BKX). After bottoming in March, and then rising above its 200 day moving average in May, the BKX has been consolidating above its 50 day moving average in an upward trend. If support holds, we could see a much stronger move upward. Typically, the Banking sector will lead the market in an extended move in either direction (whether up, or down).
Remember, strong moves in the market typically are not predicted by most "gurus." During times like these it usually pays to take a contrarian approach opposite to what the herd mentality is thinking. Keep watching the Marketdoc Report for further updates.
Please take a few moments this Memorial Day weekend to remember those who have fallen for our country. They paid the ultimate price for the freedom which you and I enjoy. God Bless America!
Note: The above is for informational purposes only. Any decision to buy, sell, or hold any investment for a specific person or portfolio should be discussed with your financial representative.
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