The S&P 500 gained 6 points to end at 1127.79, Stocks ended higher Monday as investors signaled modest optimism in the economic recovery, ahead of a highly anticipated statement from the Federal Reserve on Tuesday. August is historically a down month for the market with low trading volume and many traders staying on the sidelines.
Market spent 5 of last 6 days bouncing between 1120 and 1130. It will make a decision either up or down. Time is running out for my prediction which is market will top out at around 1150 to 1170 by 15th to the end of August. I suggest people lighten their stocks holding on the way up of this rally, it may be the last chance they can escape the phase II of this on going bear market since the end of 2007.
In the mean time, if you still holding your profitable long, you should keep holding it with tight stop. if you want to buy, the risk is too high and the profit margin is too low, the risk reward ratio is surely against you. If you want to short, you may want to wait a bit longer with your patient, 1140-1150 with extreme overbought signals will give me more confidence.
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