By Friday's close, investors found themselves grappling with the worst week for the stock market in about a year. The S&P 500 fell every day this week paring almost 4% of its gains over a period of only 5 days.
Not only did the
Grasso’s market ‘tell’ is how the S&P behaves when it hits the 200-day moving average, which is currently around 1284. As you can see from the chart, the market bounced off that level on Friday.
In fact, the trend has been in tact for well over a month. “Since June 16th the market has bounced off the 200-day. “Chart it - that’s where we’ve been bouncing,” he says.
And he adds, if you go long don’t freak out if the S&P violates the 200-day a little – markets can undershoot and overshoot. However, “If we break through significantly, then start scaling back.”
Trader Patty Edwards is also bullish - relatively. “I’m not overly worried right now,” she says. Edwards suggests putting Starbucks and Nordstrom on the radar. Edwards explains that right now she’s scaled back her portfolio and only has about 35% exposure to stocks because of the debt drama - but “I have a list and when the air clears I’m ready,” she says.