The well established bearish channel that began at the end of 2007 continues. Currently we sit very close to the bottom of that channel and the bearish sentiment in the street is quite high. Should either $129.15 or $120.02 be broken one should act accordingly. From a strictly technical/Short term oriented basis, the 200 day on the SPY is currently just above $136 suggesting there could be an 8% rally just to get us back to resistance. Consider too our US Presidential election year thesis (read Opportunity Is Now Here, a special report by The Rational Investor), one ought to see at least a consolidation in prices if not an outright rally over the coming weeks and months. One often is greeted with a sense of euphoria come inauguration day (early January 2009) and by that time one ought to look for a higher market. Ironically, that will probably be the time we will be looking for a top. So to take profits when others are euphoric one must have the guts to be buyers when others a pessimistic. As suggested, the market is quite pessimistic right now. We DO NOT have a buy signal yet! But one must be prepared for such an event. Be patient and vigilant.
That is all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com
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