Major averages rose on lower volume Friday perhaps in anticipation of the Federal Reserve's two-day meeting which starts this Tuesday. The markets are taking in stride the situation in Iraq which caused oil prices to spike, but closed breakeven on Friday even as tensions mounted, suggesting that the situation in Iraq will ultimately be benign for the markets much as the markets were able to resume uptrends after prior situations in Syria, Libya, and Ukraine. That said, averages could fall further from current levels as they did during previous crises such as in Syria, Libya, or Ukraine, should tensions escalate in Iraq. Futures are down this morning but well off their overnite lows as the markets remain relatively calm over events in Iraq. Investors should be attuned to the fact that a pullback here is a) not unexpected anyway given the extended nature of the indexes since the NASDAQ began its sharp ascent through its 50-day moving average nearly a month ago and b) and a potential buying opportunity as leading stocks pull into logical areas of resistance.
Meanwhile, even in the face of rising tensions in Iraq, individual stocks continue to flash strong technical action as we reported to members in real-time as buy points materialized last week.
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