An Investment Strategy For Higher-risk Periods

Today's Guest Post comes from George Leong, Senior Editor of Lombardi Financial. "An Investment Strategy For Higher-risk Periods" originally appeared on the Profit Confidential website on July 15th, 2011. In this piece, Leong gives a brief analysis of the S&P 500, as well as explains a strategy to combat the unsure market conditions. Enjoy with our compliments and please visit this page to obtain complimentary access to a complimentary report, "A Golden Opportunity for Stock Market Investors" as well as a free e-letter subscription to Lombardi's Profit Confidential.

The current market bias is positive, but there’s some concern about the chart. The S&P 500 breached its 50-day moving average (MA) on Monday before rallying, but has failed to mount any sustainable rebound, currently stuck around its 50-day MA. My concern is that failure to edge higher could drive the index back lower and continue the sideways channel in existence since February.

The absence of any strong catalyst could leave the broader market comatose for the summer months.

On the S&P 500, there is key support around 1,250. A break below would be bearish and see a move below 1,200. I expect the support to hold. On the upper end, there is strict resistance around 1,362. A strong break above could drive additional gains towards 1,400. Continue reading "An Investment Strategy For Higher-risk Periods"