Curt Renz Capital Resources

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Updated Monday through Thursday evenings following market days

 

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Market Outlook

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1 Month

 

 

 

3 Months

Evening Update

Our commentaries are provided as general information and not investment recommendations.  You are responsible for your own investment decisions.  Our opinions are based on historical research and data believed to be reliable.  There is no guarantee that results will be profitable.  We are not responsible for errors or omissions.  We may hold positions in vehicles that are mentioned.

After a difficult August, the September rally continued for the popular averages for a second day on Thursday. Trading volume could have been more supportive. Lukewarm economic data provided some encouragement. Pension managers with new month cash may have felt compelled to spend more of it. In reality, economic reports have not been pointing to a robust recovery. The Fed is low on ammunition and in a quandary as to what to do. So are most investors. You were warned here some years ago about consequences that would follow an inevitable bursting of the real estate bubble as baby boomers became empty nesters in ever growing numbers. As I see it the “bull market” from March of last year to April of this year got ahead of reality as a consensus (hope) formed that a normal economic recovery was underway.

 

Above is our three-month chart of the S&P 500 exchange traded fund (SPY). The puncture down through the 200-day moving average in late May indicated the likelihood that a bear market began in late April. A further technical alarm sounded when those two moving averages intersected in July, thus confirming that previous signal. A bearish Head & Shoulders pattern can be seen forming since the 4th of July. The white line marks the level of the left neckline which was revisited during late August. This week’s pop above the 50-day moving average may have commenced the formation of the right shoulder. If the price fails at this level and heads back for that white neckline, the autumn could be a rough one for investors.