retracement

Summary:

1. AXP heading up to 42.50.

2. A few more up and down days in the indices with S&P500 working it's way to 1080.

3. MCD continues higher but reaching short term resistance. Buy more if it goes to 60.

I made a call a while back suggesting that American Express (AXP) was ready to turn down at the 50% retracement from the all time high. However, it has now decisively broken above the 37 mark and looks to be heading to 42.50 which is in the region of the 61.8% retracement and the 200 week moving average. McDonalds continues on its way to 73 though is reaching short term resistance in the 62 area. The major indices appear to be in a retracement mode as stated recently. This pattern must be watched carefully because of the potential for numerous stocks to break to new highs. Some indices could follow. There is significant resistance for the S&P 500 at 1080. Breaking above that level significantly would bring into doubt the 1100 recent peak as a long term peak. For the time being, the S&P 500 is hitting retracement targets as recently noted. In the short term (several days) I am expecting some down days then a few up days and that is when we will reassess to see if an upward retracement is completing or stocks are moving to new highs.