In the current market we are in, one has to understand the simplicity of the situation and take advantage of it as well. Forget the news, forget the rumors, and focus on the truth. That truth is simple: The bullish train is hot and will keep on going for now, regardless if you put bears in front of it.
As for key levels on the SPY: I would wanna first see a break above 155.75, as that is the high of March 2000; and then a break above 157.52 as that is the high made in October of 2007. But other than that, I see all time highs coming in a jiffy.
See the thing about most people psychologically speaking, is they think that due to the fact that the market is at its all time highs, it is too late to hop on the train and therefore a top is approaching. And that is the very reason, why I believe the market could really have a serious breakout in the imminent future. At the current levels we are in, the market is where it was at roughly around 12 – 13 years ago. In other words, for the past 13 years if you put your money in the SPY, your amount would not change a dime! In fact, you would have been significantly down, as avg. inflation of 2% x 12 – 13 years, would have devalued the amount of money you have placed into SPY. So let me see… I have a market that has had this tug of war between the bulls and the bears for the past 12 years but is now reaching the all time highs across the board, I have a stimulus plan of approx. $85B dollars a month, and most importantly I have a market that is showing me money being taken out from losers and placed into winners.
I have a market that is showing me money being taken out from losers and placed into winners: An example of this is AAPL. AAPL has been the laughing stock since September of 2012 but yet the market has kept going higher. How could that be that the biggest company in the world at the time (September of 2012) has crashed and, yet, the market is enjoying prosperity? Well, because of what I stated above, the money that was taken out of AAPL was placed in it’s competitors and other tech companies such as: GOOG, AMZN, CRM, NFLX, etc. What that tells you, is that the people who are in the market are not attached to the companies they own emotionally, but rather will reinforce their money based on the performance being shown by a particular company.
More Bulls = More All Time Highs (AMZN, CRM, GOOG)
In Stockhaven’s Market Take today (3/5/13) he stated the following:
While GOOG might need a rest after posting its second straight all time high and first 5 day winning streak since September it remains the technology bull leader. I expect strong support for GOOG to emerge in the $820-$825 range where a move below that serve as as a warning sign for this market overall to me. AMZN at $275 and CRM at $185 are two stocks that I believe could be ready to follow GOOG past key round numbers at $300 and $200 much like GOOG just did with $800.
- Going off of that statement, I would expand further on key levels to watch and play on AMZN, GOOG, and CRM.
Lets start with AMZN:
- As first support I would use an intra-day level that acted as support today (3/5/13) and that is 273.86 – 274.50
- Secondly, I would use today (3/5/13) low of 269.99 – 270 as the main support short-term.
- If it goes below 270, then the obvious next psychological level is 265 – 260. But again in order to see a run to 300 in the imminent future I do not want to see it go below 270.
- The first resistance is today’s (3/5/13) high of 276.68.
- The next psychological resistance would be 280, but to be quite honest there is really no other resistances for now until 284.20 (1/30/13 high). After that it is 284.48, and then 284.72. But you can imagine that if it goes above 284.20, it explodes to 290 – 300 very quickly.
- AMZN is shaping really nicely to reach all time highs in the imminent future. Even looking at it from a risk reward perspective, you have short-term support at 270, with a target of 284 – 300.
- There is really not much to cover technically speaking on GOOG as it is in all-time high territory. But in order to see a continuation tomorrow I would like to see a hold above 832-834.50 level as it acted as support throughout the day. However, this is not imperative in order to keep the overall trend in tact as the key levels for an overall continuation in the trend (short-term speaking), is today’s low of 828.90 – yesterday’s high of 822.84. As it is above those levels we are good for new all-time highs. As for resistances; there is really one and it is today’s high of 840.15.
- I would not be too surprised to see GOOG run, in a similar fashion to the manner in which LNKD and NFLX did after their initial yearly high’s gap up.
Last but not least is CRM:
- First support is a level which acted as support today (3/5/13) 183.04 – 183.80′s.
- Second support is yesterday’s low of 181.48.
- Third support is 1/28/13 high of 178.91 – 180 as that is a psychological level.
- The obvious first resistance although it is no strong resistance is today’s high of 185.89.
- The second and last resistance I see as of now is yesterday’s high of 186.63.
- Above that it is all-time high territory and we will need to see the resistances created then. But as targets I would expect 200 to come fast with a break above 190.
- After reviewing CRM, I am very impressed by the overall monthly chart. It reminds of me of the AAPL chart back when it was in the 180′s in 2009. From 2011 – 2012, CRM just consolidated in an in between move that resulted in a breakout in late 2012 – to now. I do not see this breakout stopping. In fact, the contrary as I see it going above 200 in the near future.
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