Markets Analysis 9/15/12

I was looking back at the Up signal I posted on the India fund (IIF) back in 6/15/12 end-of-day. Since then it has weaved its way up from $14.62 to $17.11, a quiet but very impressive +17% gain in 3 months. It has also done a couple more impressive things from a technical view point.

- It has taken out the previous high of $15.79, establishing its uptrend. By definition, an uptrend is a series of higher highs.

- It has also climbed its way above the bold black line on the chart, its 200 day exponential moving average. Nice…The markets have taken note of that. See chart posted below.

Being cautious, if someone was looking to enter now, I would take a small position and wait for the pullback to add to.

Needless to say, let me contrast this move with the chart on SPY (S&P500), which too has been pointed long by my technicals since 7/2/12. In the chart posted below, there was a second confirming Up signal on SPY on 7/30/12. Right now, it has taken out its previous high and is starting to smell some rarified air above. The chart on SPY is clearly stronger than IIF which has been struggling for months dipping lower and lower and staying below its 200 day exp moving average.  

What goes high can go higher. The markets loved the fresh dose of QE3 it got from the Feds. My only concern was that 11/12 on the committee voted for the QE3; leaving little doubt that they feel the economy is making a weak recovery and could slip back into a recession. Without the smelling salts, and instead if we chose a harsher and stricter path like the Europeans have done, we would certainly be languishing in another recession – perhaps depression. But this is no political forum. We have come back from an enormous chasm and I am just glad that my portfolio is positive. I will also keep my enthusiasm down and make sure we not give up these gains. October through the end of this year is usually a positive period. Let’s hope that’s how it plays out.

Waiting to be discovered…