Time to get back in the stock market

The stock market is looking stronger even with the turmoil in the Middle East and the rise in oil prices. The economy is clearly showing signs of improvement, especially in the improving employment numbers. The pullback in the stock market that we had been expecting appears to be another very mild period of consolidation, not much different from what we saw back in November. The S&P 500 has broken above previous resistance level at the 1300 level and now you can see buying support coming in when the S&P pulls back. The stock market has been consolidating at the 1300 - 1330 levels and appears poised to move higher. The longer term valuation target on the S&P 500 is 1,463 which we are likely to see before the end of this year.

Time to take some profits again!!

The stock market has had a nice run up since the end of November, reaching levels not seen since the summer of 2008, months before the start of the financial crisis. However, the long awaited stock market correction may be coming. While the longer term outlook is still positive, with a slowly recovering economy, an accomodative fed and strong corporate profits, on a technical basis the market my have run ahead of itself. Most technical indicators which had been in overbought territory for several weeks now appear to be turning down, pointing to a market decline. Look for a pullback to what is a fairly strong support level at the 1228 level.