OGT Newsletter (Issue No. 3)
Dated 26th November 2012
In this issue, we will be giving a short update and forecast on the S&P and what to expect going into the new year based on what we see in our technical analysis.
But first, let’s review what happened after we posted OGT newsletter issue no. 2. In our earlier newsletter issue 2(dated 13 October 2012) posted on S&P, we forecasted the S&P to go down. However, immediately after our post, the markets rallied on monday 15th October 2012 and eventually touched 1464 for the S&P. But from that point onwards, it was all the way down and the S&P touched a low of 1343 on 16th November 2012. The index at 1343 was quite closed to our forecasted target of 1325 in our previous newsletter post. Going short based on our recommendation would have yield quite a decent profit even at the point of our post on 13th October 2012. Traders who have taken the short trade should have taken profits near 1350.
The S&P has sinced rebounded upwards for the past week to reach above 1400. For the S&P looking ahead, it is very foggy going into the new year, if it breaks the high of last week at around 1409, traders should ensure to go into more long stock positions and even look to long the S&P. However, on the other hand, we suspect there is another leg down towards the new year or after the new year. If the S&P does not break through the high of around 1474 established on 14th September, a good trade will be to short near that resistance level for a good risk to reward ratio of at least 2 if not 3. But if the S&P break that resistance level, be sure to add to long positions. As it is not so clear now, we would maintain a cautious approach when its more clear going into the December month.
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