The bearish sentiment on the street is almost getting palatable. Government bailouts of Fannie Mae & Freddie Mac coupled with talk of GM going out of business are the classic ingredients for a bear market. They are not the ingredients for a good short trade though. Those that had the gumption to sell (or even to go short) in May and walk away are the smart ones, those that sell (or even go short) now are just asking for trouble. As previously stated, the longer term picture is indeed bearish (lower highs and lower lows is the definition of a bear market) but the market is very oversold in the short term. A trade back above $130 would flash a daily buy signal (notice the double bottom forming over the past four weeks). That has not happened yet but should it, there may be quite a rally based more on short covering rather than any new fundamental buying opportunity. Shorts BE CAREFUL!
That is all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com
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