Tags: Stocks | risk | break | range

Ralph Acampora: Stocks Could Be at Risk If They Don't Break Out

By    |   Thursday, 23 July 2015 08:30 AM

While The S&P 500 index stands only 1 percent beneath its record high, it also stands virtually unchanged since March 2. And that points to risk for the market, says veteran technical analyst Ralph Acampora of Altaira Ltd.

During this 4 ½-month period, "we saw several instances when the leading averages registered new highs, but only for a few days before selling off again," he told CNBC. The S&P 500 reached its all-time peak May 20.

"If we don't see new highs, it falls into this category that we're churning just like we did the last five months, and leadership is very narrow here," Acampora said. "Current leadership is in consumer discretionary and staples, financials, health-care and select technology sectors."

To be sure, Acampora still sees the S&P 500 index rising through year-end, reaching 2,250 to 2,300, up as much as 9 percent from 2,112 Wednesday. But he stressed that "we need new highs, or I'll have a problem later on."

Elsewhere on the investing front, you may be tempted to stake out investment positions based on news headlines. Perhaps you thought about doing so when news was pouring out of Europe in recent weeks about Greece's debt crisis or when China's stock market stumbled.

Well resist the temptation, says Barry Ritholtz, CEO of Ritholtz Wealth Management. And why?

  • "News is factored into stock prices by the time it’s on the front page," he writes in The Washington Post. "These stories develop over time. The headlines tend not to come out of the blue but are the result of incremental events over months and years.
  • "Headlines don’t drive markets. Profits and valuations do. These geopolitical events make for big splashy headlines, but ultimately have little effect on what matters to stock prices: corporate profits.
  • "Guessing isn’t investing. Making big bets on outcomes that are a 50-50 probability is not investing, it’s speculation."

What you should do is focus on areas you can control, such as adopting an investment plan, keeping your costs low and avoiding short-term trading, Ritholtz says.

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While The S&P 500 index stands only 1 percent beneath its record high, it also stands virtually unchanged since March 2. And that points to risk for the market, says veteran technical analyst Ralph Acampora of Altaira Ltd.
Stocks, risk, break, range
362
2015-30-23
Thursday, 23 July 2015 08:30 AM
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