The short term bottom we thought was in the market last post has been broken. While we know the medium term trend remains down and shall be so until the 13 EMA crosses back above the 30 SMA, there were indications we might get a rally into the Obama inauguration (Jan 20th). The January Options expiry proved to be too much supply and the little uptrend that was in place was indeed broken. Notice too that the market rallied up to the 13 EMA and then backed off [Technician's note: This is a great little timing tool on its own as well]. Should we put in any type of top over the coming weeks it shall suggest the lows of the fall will need to be tested in earnest.
We are once again left sitting on the sidelines for the time being. As previously stated, medium & long term investors have no business even looking at the stock market yet, but traders shall (at some point) be given an entry point on a long trade that I believe will ultimatly take us back to the 50% level (near 113). Considering the seasonality, I wouldn't be surprised if that occurs some time into the spring. Unfortunaly, that trade isn't here yet, so once again we are left to sit on cash and watch the fireworks.
That's all for this week,
Brian Beamish FCSI
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