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Confidence Index Before the Storm

ADP will be releasing their unofficial unemployment numbers tomorrow following confidence index numbers that were just shy of expectations.

The market gave up a couple of points on the news to close mostly flat on the day with some stocks doing well and others doing poorly. Stocks haven’t been moving in any convincing direction for the last week ever since we began running into a couple of Fibonacci resistance levels, the 200 week EMA and a long term downward trend line (see chart below).

Running Into Resistance

Running Into Resistance

So where am I going with this?

Nowhere for now. There are still bullish chart set-ups with targets around 1100 and I still think it is too easy to be bearish for it to be profitable so I am staying long – although very cautiously. I am searching and buying stocks if I think they represent amazing value but I am steering clear of the rest.

I will be reviewing my holdings this week with the goal of selling/trimming positions which are near or have reached my predetermined price targets as well as reassessing whether or not my targets are still valid and appropriate.

I recommend everyone else to the same while also making a list of stocks that you would like if they were 5-10% cheaper. Things could get dicey in the near term and it could offer great buying opportunities.

-MJB

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