As per my most recent posts,
'the market is moving higher and I am looking for that to continue...and'...because the 13EMA is higher than the 30SMA we must be looking for higher prices for the time being. Should that relationship change, then our 'Investor' stance will change appropriately.' I am and will continue to be bullish on equities going forward. However I must raise a cautionary note to any new readers and/or new investors. This recent rally is, in my mind, a classic 'dead-cat-bounce' that has taken us from 'the brink' back into resistance. THIS IS NOT A BULL MARKET. Please understand this going forward.
This week I thought I would include a chart of the market (expressed through the S&P 500 depositor receipts, SPY) with an overlay showing the waves of this bull run (blue dotted line). One technician, R.N. Elliot, theorized that bull market moves happen in three waves. (learn more about Elliot wave theory on Wikipedia here). Considering where our target box is, a final climactic 'blow-off' top into the 120 area seems to make sense. My hunch is that will happen some time in the first quarter of 2010. That is several months away and I think a realistically achievable target. In the short term however, the market has moves substantially away from both the 13EMA and the 30SMA suggesting there is a growing risk of a short term correction. Since there are annual profits to be had by selling stock, investors may find a last minute 'rush to the exits' correction occurs because of nothing more than tax reasons...
That's all for this week,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
the-rational-investor.com
1 comment:
As SP500 is reaching its 50% retracement level from its low of 2009, the market is positioning for a major correction. Current price level is a great opportunity (possibly a opportunity of a lifetime) to into SHORT positions. I listed a few stocks to go short in my blog. Feel free to check it out. Thanks.
Michael from
http://investlongandshort.blogspot.com/
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