The stock market this week so far is very strong and bullish. Investors were encouraged by a preliminary agreement between the White House and Republican leaders on a tax package that would extend the current Bush cuts for two years. A reduction in payroll taxes for a year, an extension of jobless benefits, and a reinstatement of the estate tax at 35% are also part of the plan.
Stock markets are going back up testing their recent highs, just as we indicated last week. Some markets have gone into new 52 week highs already.
So we have to keep our eye on the charts, and when the longer up trend breaks down, then I have to be ready to exit the market. Upside potential is probably limited by the overhead trendline that has been in play all year long. So if we reach Nasdaq 2650 or S&P500 1250 this week, that will be a very good selling price. So I am ready to sell near Nasdaq 2650, or S&P500 1250.
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