Here is the cover commentary from this quarter's RI newsletter:
"Hello again from the Rational Investor. The first quarter of 2009 is now behind us and it is time to look forward into the spring. As is often the case, the markets are enjoying a seasonal bounce off of the lows made last fall. This time around, we seem to be ‘climbing the wall of worry’ regarding the economy and the duration of the current recession. Ironically, it is at the time when the talking-heads are most pessimistic one ought to be interested in the market. And only when they turn bullish should we consider exiting. How long this current rally can last is anyone’s guess but considering the bearish economic backdrop, the horrible January Barometer reading, and a market that has now relieved the oversold condition it was in a few months ago, a seasonal top may materialize sooner rather than later. Regardless, the market is moving higher so as one pier use to tell me, “make hay while the sun’s shining my boy”…"
(for your subscription to the rational Investor please visit the web site at http://www.the-rational-investor.com)
I think this sums up the market well. As investor optimism gowns into the typical seasonal peak one ought to look for a serious test of the current stop point somewhere near the 95.00 area on the SPY. Once the seasonal top is in I would expect the lows of the winter to be tested once again. It would only be at the point where the market tests that low (and it is not breached) and the reverses and turns back up through whatever high we register over the coming weeks to truly believe the market (and the economy) has turned the proverbial corner.
Considering the January Barometer's reading (go to the web site for that article) traders are not expecting this market to bottom just yet. Until this 'W' pattern does come in, I will temper my enthusiasm. Having said that, as the above commentary says...there are few periods of the year when the bullish sentiment pushes the market higher. We are in that kind of period now. For those bullish traders out there -enjoy it while it lasts. Once the seasonal window closes (I am using the June deadline for the conversion from analogue to digital TV service as my catalyst) I shall once again look back to the downside as we head into both the summer doldrums and then the fall.
That's all for this week,
Brian Beamish FCSI
the_rational_investor@yahoo.com
the-rational-investor.com
No comments:
Post a Comment