S&P 500 index closed this week at 825, near the November low of 800. We are testing the November low as I indicated last Friday. Again, this is an important support level. I hope the market can hold it at this level, otherwise it will be an ugly February.
Let's review the chart of FSAIX that I mentioned in my blog on 1/9. At the time, the price of FSAIX climbed above its 28 weeks EMA, and its STO[15,1] climbed above 50. The chart look bullish in the intermediate term. However, the rally quickly fizzled in the past 3 weeks. As you can see in the chart below, its price falls below the 28 week EMA and the STO[15,1] drops below 75. This just shows how difficult it is to rally and sustain the uptrend in this perennial down-trend condition. Before the overall trend turns bullish, one has to be skeptical about any rally. In fact, these rallies may be a good time to unload your current holdings.
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