Those that did sell in May and walked away are feeling pretty good about themselves these days. The broader stock market continues to deal with rising energy prices and a poor relative earnings picture because of the housing debacle. While readers should be very comfortable with the idea that I believe energy is near a top, picking the exact top is never easy. As a result, violent price swings and calls for huge upside price targets should be expected. Keep in mind our basic rational investment policy - we wish to be sellin' when they are yellin and only buyin when they are cryin'. These days they are definetly yellin' in energy and simultaniously they are cryin' in the stock market.....enough said
Seasonally we should be looking for a bottom near the end of June. I believe this bottom is near and the chart above demonstraites that regardless of the prevailing market pesimism, we are just now getting back to an area of significant technical support. One should look for support in and around the $127 area on the SPY. Be very careful about initiating new short positions as we are oversold and could bounce very easily. While this won't represent a 'Buy' signal (as we need to see a double bottom in price before we can get outright bullish) short term traders may see a window of opportunity once the shorts are on the run.
That's all for this week and thanks again for your interest,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://the-rational-investor.com
No comments:
Post a Comment