U.S. Stocks closed out the week with losses on Friday, and the market's 4 week winning streak was snapped. However, the overall pattern is quite solid and still points to higher prices ahead. The market is forming a small continuation pattern, and will head higher once it is broken to the upside.
Ultimately, though, the market is due for a correction. In a couple weeks we will also be heading into a seasonally weak period of the year, September and October. During that period, we will be getting an idea of what kind of legislation will be coming out of Washington in regard to health care and energy. If Congress passes legislation that is much more watered down, the market should react favorably. If, however, the Democrats push through a bill by the use of reconciliation, the market will definitely react negatively, as a sizable health care bill and cap and trade will be viewed as drags on the economy.
Stay Tuned!
Scott Cole
www.theultimatestocktradingsystem.com
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