• Market Insight

Double Bottom Forming On Wall Street 02/17/2016

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Market Update:​
In the last 4 trading days the S&P 500 has soared 120 points or 6.6%! That is not an insignificant sum and now extended to the upside (in the short term). Remember, the biggest moves (both up and down) in the market’s history tend to occur during bear markets.  It is important to note that new leadership still remains virtually non-existent and the market continues to be led higher by beaten down areas such as Materials ($XLB) the Transports ($IYT) and Energy ($XLE, $OIH etc). 
 
Bullish Double Bottom Pattern:​
The major indices are forming a bullish double bottom pattern (attached) which typically is a bullish sign. The last time this happened was in Sep-Nov and the S&P 5000 soared 13% in a few weeks! The S&P 500 already vaulted 6.6% in the past few days so we are open for any possible outcome. These exaggerated moves (up and down) typically happen during bear, not bull, markets. What we do know is that the major indices will face stubborn resistance near their declining 50 DMA lines and the-mid point of the double bottom pattern.  Conversely, if last week’s lows are breached (1810), we have to expect another leg lower to commence. 
 
FLS Portfolio
The service bought the QQQ’s on Tuesday when the market gapped up. We are raising our exit to 98.74 to help protect our position.  We want to let the market pullback a little and see how it reacts near resistance before adding more risk. Thankfully, the service is long and comfortable right now.
 
A. The service owns: QQQ +2.85%
B. The service will exit: QQQ @ 98.74 
 
Working Orders:
There are no new working orders today
 

Disclaimer: 
This analysis contains information from resources believed to be reliable but are not guaranteed as to accuracy or wholeness as of the date of this publication. Past performance is not necessarily indicative of future results. There is always a risk of loss in trading and investing. Opinions articulated are subject to change without notice. This analysis and any opinions expressed are intended for educational purposes only and should NOT BE interpreted as a call for engagement in any transaction involving the purchase or sale of any security or investment product or service. The risk of loss in investing and or trading can be substantial, and traders/investors should carefully consider the inherent risks of such an investment in light of their financial condition. The author, firm, associates, or the firm’s clients may have a position in any of the investments mentioned and their positions are subject to change without notice.  Any reproduction or retransmission of any portion of this report without the express written consent of Sarhan Capital is strictly prohibited.

 

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Adam Sarhan

Host Of The #SmartMoneyCircle Podcast, Founder and CEO of 50 Park Investments. Adam provides weekly market updates to ChartYourTrade.com readers. He is a FORBES Contributor and is a frequent guest on all the major financial media outlets.

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