You remember that we have a means of determining what kind of a market we are in. Is it a Bull, a Bear, or Transitioning between the two? This is the very First Essential Principle of Successful Stock Market Investing. Always know what kind of market you are in. And, how do we do that?
Traders like the 50-day and 200-day moving averages of the S&P 500 and the relationship the price has with them.
Allow me to lift a paragraph from the end of last month:
“The S&P 500 did close above its 50-day moving average, and its 200-day moving average, and above its 17-month moving average. We have favorable seasonality for the next few days. The ‘Sell in May, Go Away’ folks should be coming back. It’s pierced all kinds of resistance levels, and has moved right back into the very same trading range it had been bound within for all the past year, until the August/September spill… and, now, here we are!”
Right now, as of November’s close, the S&P 500 is at 2080.41. That is above both its 50-day, presently at 1905.91, and its 200-day, now at 1947.20.
Note, the 50-day is below the 200-day, and it has just begun to turn back up. Meanwhile, the 200-day, again, above the 50-day, had turned downward, and has yet to turn back up! But, by Wall Street’s own definition, they would say that the Bull Market, which commenced way back in March of ’09, is still intact; though it gave quite a scare back in the Summer!
At the end of each month, other big Wall Street trader types rely upon a 17-month moving average, and I reported that it had come back thru that, as well. And, it’s still there. In fact, the 500 is at the place that it was… just about this time, 1 year ago!
That’s amazing! But through all that time, we made money, because we were growing a portfolio dividend income, and we’re just about to receive word of our monthly statements for November being available, that we might calculate the progress that’s been made since the 500 was trading at this level one year ago. If that progress is like anything I’ve been able to report in recent months… every investor who is buying-to-hold for long-term growth, and saw essentially no real capital appreciation to speak of for the past 12 months, will really be impressed with what kind of forward progress they can be making month-after-month, if they were to be investing for the safest possible growth of a portfolio dividend income. That’s coming very soon.
And, as of 7:00 a.m. EST, we have a positive 1/3 of 1% increase in the futures trading overseas, as they look to the open of our markets at 9:30. So, here we go… December looks to open bullishly!
Minutes before the open and pre-openers are still up, and now by even more! Some 4 tenths of 1%. Have a great one!
Here’s to your successful investing!
Harold F Crowell