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WALL STREET CRAPS STOCK MARKET STRATEGY – JANUARY 31, 2016

January 31st, 2016

craps front coverSTOCK MARKET STRATEGY FOR JANUARY 31, 2016: The stock market had a successful test of the previous bottom resulting in a rally on Thursday and Friday. But with the internal indicators at or near “overbought” levels, it would not be surprising to see a short-term top this week and another leg down into mid-February. So it may be wise to lighten up on long positions into strength over the short-term with the intention of buying back on the next oversold bottom later in the month.

Key underlying short-term market indicators show the following:

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THE BOTTOM LINE: A short-term top may occur this coming week with the next low and buying opportunity coming in the following week to 10 days. When the next bottom comes, it would probably be smart to avoid stock-picking and just buy a mix of broad-based Exchange-Traded Funds such as DIA, SPY, and QQQ. It seems like getting too clever with stock choices is not worth complicating your trading strategy or risking any negative reactions to earnings news associated with individual stocks.

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