A Bounce In A Bear

Hi there, and welcome back to RI's S&P 500 blog.



The definition of a bear market is one that makes lower highs and lower lows and one that has moved more than 20% lower from its peak. As the chart above clearly demonstraights, we are now down more than 50% from its peak of more than one year ago and we continually make lower highs and lower lows. In a simple sentence - this is a bear market and will be until the market can establish a pattern of higher highs and higher lows and one that stops going down!

Having said that, we here at the RI, we have been looking for an ultimate move lower into the high 50's on the SPY. This target was established when the market confirmed the bear-flag-pole formation - refer to blog from March 10th - 'To give us an idea of a possible downside target one only need to look at the bearish flag-pole formation. (where the market peaked last Aug. near 128 - then fell dramatically down to a low near 82 in Sept. - then rallied back up to 105) . A break of 82 (which happened in Nov.) suggests prices need to fall down to the 59 level.'

What does this mean, traders ought to be short on a break of the recent lows (at or near 73.74) with stops just above the recent peaks (at or near 95.00). Investors have no business even looking at the US stock market for now. Current downside targets suggest the 59 area on SPY should be tested in the coming months.

That's all for this week,

Brian Beamish FCSI

the_rational_investor@yahoo.com

the-rational-investor.com

Lower highs and lower lows defines a bear market

Hi there, and welcome back to RI's S&P 500 blog.



The bear grinds on and on....

Looking at the above chart one can't help but feel a little depressed. We are now down 50% from the peaks amid 30 year highs in unemployment and a frozen banking system.

As a leading indicator, the push lower (and a break of the important fall low at 73.74) suggests we are not out of the woods yet. And the January Barometer (please visit website at http://www.the-rational-investor.com for your copy of this handy report) suggests there is further price deterioration ahead. Ugh!

Again, referring to the chart above, we are now comfortably within a steep downward pointing channel (deep red lines). This is bearish and will remain so until we start seeing higher highs and higher lows. As well, the moving averages are very comfortably bearish (13EMA < 30 SMA) also suggesting we will remain bearish for some time to come.

Should a rally come (very remote at this time!), my ultimate upside target for the present will be the gap (gaps don't like to be left open - especially on weekly charts) between $105 to $110. This would represent a move back to 10,000 on the Dow and a big psychological target going forward too.

What does this mean, traders ought to be short on a break of the recent lows (at or near 73.74) with stops just above the recent peaks (at or near 95.00). Investors have no business even looking at the US stock market for now. Current downside targets suggest the 59 area on SPY should be tested in the coming months.

That's all for this week,

Brian Beamish FCSI

the_rational_investor@yahoo.com

the-rational-investor.com

The Painful Road Lower

Hi there, and welcome back to RI's S&P 500 blog.



The important 73.74 has been broken on the SPY suggesting there is further downside price pressure in our future (ugh!).

As stated previously, weekly signals are still very much bearish so there is no reason for an 'investor' to be even looking at the stock market.

Traders should indeed be short from these levels with your associated stop just above the recent highs at or above 94.55...

Down side trading targets: The recent failure of the market at 73.74 suggests lower prices going forward. To give us an idea of a possible downside target one only need to look at the bearish flag-pole formation. (where the market peaked last Aug. near 128 - then fell dramatically down to a low near 82 in Sept. - then rallied back up to 105) . A break of 82 (which happened in Nov.) suggests prices need to fall down to the 59 level

That's all for this week,

Brian Beamish FCSI

the_rational_investor@yahoo.com

the-rational-investor.com

And The Bear Grinds On

Hi there, and welcome back to RI's S&P 500 blog.
(The is a re-post of the missing blog from Feb 25th, 2009)



The recent trading range is being tested to the downside. Among further talk of bank failures in Europe and North America, the selling on Wall Street continues.

Because this a re-post and not the original post (lost somewhere) I will keep comments to a minimum.

Traders should look to go short on a move in earnest through the fall lows at 73.74 on SPY. Should that trade occur, place you stops just above the high of the range at or just above 94.95.

Since the 13EMA is well below the 30SMA, investors shouldn't even look at the market. We are very much in a bear market with lower price expectations for the future.


That's all for this re-post and lets hope next week's blog isn't lost,

Brian Beamish FCSI

the_rational_investor@yahoo.com

the-rational-investor.com