We pointed out (the 11th or 12th Feb) that price was between the bump high and the low. The bump high has now been taken out which is of course a bull positive. Now price is again betwixt and between — between the July trendline as support and the August trendline as resistance. Also under the Nov 2007 trendline as resistance. Nonetheless investors should still be long the indices as the Basing Point stop was not taken out.
These waves (downwaves) in equity and erosion of paper profits are as natural as price waves in the market. Patient and wise investors just smile and bear them. When the Basing Point stop is taken out we’ll know it’s time to run for the hills.
In addition there may be some big events brewing which we will address later in the week.
A close up: