MILLENNIUM WEALTH STRATEGY: Markets trade back to Critical Support

Euro worries, a China economic slowdown ,and falling US consumer confidence have driven the stock market back to levels of critical support. As I write the Dow Jones Industrial Average is down 261 points at 9876 and the S&P 500 is trading at 1041. We are closely watching the 1040 level on the S&P 500 index and any significant break of those levels will move us back to a defensive position. The market has been extremely choppy and volume has been very light the last few months. Currently our momentum and other technical indicators favor exposure to equities. Many of these indicators turned up on the recent move off the lows. We were seeing some positive internal readings of momentum and participation in the various indexes we follow. A break of old lows would make many of those readings suspect. The rule of trading is to be disciplined and not let emotions dictate your investment decisions. While it would have been very easy to exit our positions over the last few days, we will follow the technical indicators and put emotion aside.

S&P 500 at critical support