The stock market took a beating for the week as an agreement on the fiscal cliff was never reached. It is almost inconceivable that our politicians would derail an economic recovery but apparently they have. Either way, here at Wsss.com, we try not to get caught up in the day-to-day news. There will always be opinions that sway people’s decision making- processes but, the only things that should sway ours are prices- and right now, prices are getting attractive. Let’s take a closer look.
We are approaching the 38% retracement level (purple line). If this line acts as support next week (which it should), we will have an attractive entry point for stocks. This is a key level pay attention to it closely. Now let’s look at the moving averages.
We are approaching the 200 day moving average (about $1 away at $82.00). This is the line in the sand for stocks; if it is broken- look out below. There is still support at $73 so don’t panic, keep your stop-losses wider than usual for some.
Update: Portfolio performance the following Monday (New Year’s Eve 2012).