In the S&P chart below (chart as of November 15, 2011) I’ve marked some green lines that are showing the S&P’s support and resistence. If you notice we have a wedge pattern that the S&P has been trading within for the last two weeks.

I’ve marked a circle on the chart. That circle was when I told subscribers to my “Go With The Flow” Index Trading Strategy to move into cash. As you can see the S&P is currently in the same spot it was back on October 31 when we moved to cash. We have been going with the flow.

Soon the S&P will break out of the current wedge and by the looks of things, it could happen as early as Wednesday the 16th. As soon as you see the S&P close above or below the green line, that’s your signal to go long or go short.

If you don’t have the time to monitor the markets, or are not sure what to invest in when the signal comes, join my “Go With The Flow” Index Trading Strategy. I’ll email you when the time is right and I’ll email you what I’m buying to you can copy and do the same as I. Easiest way I know to trade.

In the graph below you’ll notice the head and shoulder with a neckline (support level of the two shoulders) at 1250 on the S&P. Once the S&P crashes through the neckline, then the H&S is officially formed. Before that, it could rise and create a different pattern.

To figure the bottom, you normally take the height of the pattern (from neckline to top of the head) and subtract that amount from the neckline to get the bottom.

Since the neckline is at 1250 and the top of the head is at 1370, that gives us a height of 120 points. So taking the neckline at 1250 and subtracting 120 will give us a bottom at 1130.

The S&P has played with this area on several occasions recently. Check out these days and the S&P lows on those days:
8/8 – 1119
8/9 – 1101 (the day I claimed we had bottomed)
8/10 – 1118
8/11 – 1121
8/18 – 1131

The S&P has been bouncing around a low of 1120 on average and today (8/18) it hit a low of 1131. If the S&P hits around 1120 again, that may be a good time to start getting greedy and doing a little buying.

 
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Forget for a moment that the US is on verge of default and that this is just normal times. The S&P is showing higher lows a bullish sign. It was showing higher highs (another bullish sign) but that all ceased a few months back. Now we are beginning to see lower highs as the deadline for the debt crisis nears (a bearish sign).

The S&P did find support last Friday at it’s 200 Day Moving Average. Should it fall through that this week and make a LOWER low, the markets will probably be heading lower. For now it should just head sideways another month.

That’s the way I see it barring the debt crisis. Throwing in the crisis, I and many investors (as evidenced by all the selling this week) do believe the credit rating will go from AAA to AA thus causing the S&P to lose 4% to 9% of its value (based on what happend in other countries).

If favorable news comes out in the next day ot two about the debt crisis, we should see the markets rise the rest of the month. If the downgrade comes, look for a return to 1250 before a bounce may be due.

Today the market is at peak and if you look at a chart, you’ll see it has gone sideways since Febuary.

Because the markets are back where they were before the crash, all the great gains have come and gone. At least until after the next big crash.

Inflation is coming and when it comes, the market will crash again. I’ve taken most of my money off the table.

Also, my trading style (swing trading) relies on quick short-term gains. It’s become much harder to find those opportunities now.

If you must get into stocks, I would go with a more BUY and HOLD strategy and ride through the upcoming crash. You won’t have fun trading but I would suggest a mutual fund or ETF that specializes in health stocks.

As the baby boomers age, health companies are going to benefit from the huge numbers of baby boomers. So these stocks should do well the next few years or more.

Also I like Gold. When inflation hits, gold shoots up and inflation will hit. The government has NEVER been able to control it, even though they say they will. The only question is, when will inflation take off?

Listen to the news and you will hear we are currently facing possible problems with our debt and us losing our AAA debt rating. Also expect more home foreclosures in 2012 and commercial foreclosures will start in 2014, this also spells trouble for the markets.

So I can’t really see where stocks are going to move up any higher any time soon.

The reason you want to study great stocks is to figure out why they made their jumps. Was it earnings? Was it a new product? Was it a technical signal?

Study enough great stocks and you may find a pattern or a “signal”, as I call it, that a stock is about to make a move.

In the list below, I’ve broken it down into the 5 best gaining penny stocks (price must be greater than one penny but less than .50) and the 5 best gaining non-penny stocks (a price of $1 or higher).

Penny Stock:
SNDTF + 2,341%
APYI + 1,455%
WSCC + 640%
SWRI +500%
TOVC +458%

Stocks Over $1:
RITT + 403%
CDTID + 274%
ENVK +241%
MROE + 147%
HUTC +142%

 
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