What to Do in a ‘Poised Market’
10/31/2011 6:30 am EST
The market is stuck between way up, sideways, or down, says MoneyShow’s Jim Jubak, and he has some suggestions on how to deal with this type of market.
Someday, you’ll be able to tell your children you were here. You were here when Jim Jubak invented a new description of the market.
For the week ahead, I think we’re dealing with what I’m calling the "poised market." This is the market that’s poised between up, down, sideways, good, bad—whatever—and it’s really something that has to be across the board. You can’t have a poised market if it’s just technical, but we know what the trend is in the macrosphere.
Now we’ve got a poised market where everything—news, macroeconomics, technical analysis—are all stuck between up and down. So what we’re looking at right now is a market where we’re saying "Oh, well, we’re going to get something out of the Euro debt crisis."
We’re going to get a solution, or we’re not going to get a solution. We’re going to get a good solution, a bad solution. The news will determine which way it breaks.
We’ve got a similar thing going on in terms of macroeconomics which is, well, is the US economy slowing? Is the US economy accelerating? China, etc. all around the world.
The only place we really know what’s happening is in Europe, and there we know that the economy is slowing. They’re headed toward probably—may not make it technically—a double-dip recession. OK, so we don’t know what the US and China are doing either. They’re slowing, they’re not so slowing—whatever, time will tell.
Last thing is, technically, if you look at the charts, we’re sort of pushing up against resistance, the 200-day moving average at about 1,270 on the S&P—which also happens to be the June lows—so we’re at a level where we’re either going to break through this and keep ongoing for another 100 points or so, or we’re going to fall back.
All these things will be resolved with time. I think that’s what we really need to take a bit of for the next week. There’s no use trying to guess at this stuff. I mean, your guess is as good as mine about what’s really going to happen in Europe…
You know, this is all just moving way too fast. It’s all too unpredictable. So my suggestion is, when you’re dealing with a poised market, you should give yourself a little time to wait for some of this stuff to resolve.