Hi there, and welcome back to RI's S&P 500 blog.
Can you say 'Kaboom!'
Here at The Rational Investor we have been bearish for quite some time. In fact, I had been looking for a climactic selloff to signal a potential bottom - and boy did we get it! Our most recent downside target had been $107 on the SPY and on 10/06 that target was hit. At that time it was recommended to take profits on the short trade (Please refer to our message board on Silicon Investor for recommendations and notifications from RI. You can find it here: http://siliconinvestor.advfn.com/subject.aspx?subjectid=57519 ).
For the time being (and probably for a few weeks to come) we shall be sitting on the sidelines watching for a new consolidation. Monday's price action was indicative of the proverbial 'dead-cat-bounce'. Yes it was dramatic and yes it was on some fundamental news but in all honesty - one day a new bull market does not make. Rational Investors will be looking for confirmation of the bottom. We ideally want to see a solid test of the lows from last week and then a subsiquent rally through whatever highs we are registering now (ie. the price action should look like a W). As well, it should be noted that there remains a gap to be filled at the closing low from Friday (at or near $88.50).
The market has paniced and shorts were very profitable. Seasonally we should be looking for a bottom. Looking does not mean we have found one though. For now we sit and wait - period.
That's all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
the-rational-investor.com
Can you say 'Kaboom!'
Here at The Rational Investor we have been bearish for quite some time. In fact, I had been looking for a climactic selloff to signal a potential bottom - and boy did we get it! Our most recent downside target had been $107 on the SPY and on 10/06 that target was hit. At that time it was recommended to take profits on the short trade (Please refer to our message board on Silicon Investor for recommendations and notifications from RI. You can find it here: http://siliconinvestor.advfn.com/subject.aspx?subjectid=57519 ).
For the time being (and probably for a few weeks to come) we shall be sitting on the sidelines watching for a new consolidation. Monday's price action was indicative of the proverbial 'dead-cat-bounce'. Yes it was dramatic and yes it was on some fundamental news but in all honesty - one day a new bull market does not make. Rational Investors will be looking for confirmation of the bottom. We ideally want to see a solid test of the lows from last week and then a subsiquent rally through whatever highs we are registering now (ie. the price action should look like a W). As well, it should be noted that there remains a gap to be filled at the closing low from Friday (at or near $88.50).
The market has paniced and shorts were very profitable. Seasonally we should be looking for a bottom. Looking does not mean we have found one though. For now we sit and wait - period.
That's all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
the-rational-investor.com
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