Weak economic fundamentals say the market should start heading down. But what do the charts say?
When the S&P 500 topped in early 2009, it quickly broke through its 20-day moving average on its way down to lows realized in March. The current rally is showing more strength. It hit an intra-day high of 930.2 on May 8 and then proceeded down. But it subsequently found support on its 20-day moving average (the blue line).
Is the market now consolidating for a big rise or drop? The technicals could go either way.
It could hit 930 again and bounce back down. That would be bearish. The market has been doing a great job of surging on the good news and ignoring the bad. But that can only go on for so long. Yet, it’s not out of the question that the market can continue its irrational climb and break through the 930 barrier.
I believe it’ll drop sooner rather than later and not move significantly beyond its intra-day high of 944 back on January 6. When it does begin to drop, it could revisit the lows of January when it hit 800. But I think it’ll go much lower and test the lows of this past March.
And that will remind people that we’re still in a bear market with lots of unwinding to do before the economy truly bottoms.
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Good reading and reminder. But that’s all there is to say about it. Charts are deceptive in these extraordinary times. The Government Men can also read charts. With all the massive spending and money printing going on THEY will certainly back up or even “lead”markets higher. It is a prerequisite for this mad play that is going on. The hole is getting deeper every day and the point of no return is behind us. So dangerous times for “investors and speculators” alike.
Play the market day by day I would say and be prepared for big unexpected moves/girations in both directions!The US Government (Goldman Sachs) can NOT be trusted.
You didn’t say anything, you give all possibilities and really didn’t support you opinions with fundamentals and facts.
A lot of other people are saying this rally is irrational also. I wonder if the rally is do to investors dumping treasuries and with no where else to invest using those funds in the stock market(of course China is doing this and I assume other countries and buying commodities which acts as fuel for this rally). Apparently the investors are brain dead enough that they do not realize that higher commodity prices mean lower corporate profits and corporate profits also reflect the layoff of millions of workers(the increase in corporate profits from the decrease in wages can last only so long before it backfires). Also where is the best place for a dollar-as a currency or invested in the stock of a company? Which will hold it value better the company or the dollar bill or a bar of gold. I can see gold getting beat up as it did last fall do to margin calls. The next problem with gold long term is the 28% tax rate if the IRS can enforce it when the chaos really begins(guns and pitchforks and waterboarding)(for some insane reason reason when I think of the big bankers I think of waterboarding LOL)
If one can predict the movement of the market, then every one would be rich.
James
So now that the S&P has broken to a new 2009 high and with 1000+ likely, what is your forecast. I would remind everyone of the tried and true aphorism: Don’t fight the Fed (and now you can add the Treasury).
From what I’ve seen so far causing this rally is the HOPE of a recovery. This is spurred on by analysts getting the data and then claiming a lower number than the data then claiming it is “better-than-expected”. For example, let’s say consumer spending is down 2%, the Wall Street analysts then say they predicted it is down 3% and then say that being down 2% is better than the expected 3%. This sounds like BullS&^% to me.
Another trick analysts use to rally the markets is they removed Citicorp and GM which have dragged the Dow in the mud. Let’s say you got a 0 on a midterm and an 80 and 100. The teacher drops the lowest grade of 0 and you get a 90. Your new GPA will be 90 instead of 60.
To me, this reeks of desperation by Wall Street begging people to buy stocks so they can inside trade and pull the plug on this so-called rally and take people’s money. And these sheeple fall for this!!! Because they take money off of our Red-Flag Insider portfolio by wasting time, I have no remorse when these sheeple lose their shirts to the market for being idiots. These sheeple were fooled twice, shame on them!!!!
06/7/09
Dear Newsletter:
Think the SP500 is going to “400/300″: look at the long term chart.
-arizona, nevada, new mexico, China(worst drought/bad rice harvest),
S. America(lakes and rivers drying up, disappearing), Australia(dryest continent on planet), many parts of the world will become uninhabitable, as a result of global warming, no more fresh water.
-as a middle east arab diplomat said earlier this year, “there will be war within a year to 1.5 years”. They are within range, and cannot wait until fundamentalest extremist country that has threatened to wipe them from the map actually develops their “civilian use project”.
Sometime 2nd half of last year, saw on some newsletter a chart of “Yen Carry Trade Positions - Percentage Still Open”: what is the latest on still open volume? Can you send, or publish the latest charts?
Very truly yours,
Subscriber