Readers – please feel free to use the ‘comments’ feature of this blog to share this type of information. There are many readers of this blog with so much useful information that we can all benefit from.
One-Day Wonder?
November 19th, 2008 at 11:04am · 2 Comments
A reader emails to note that yesterday was a rebalancing for the S&P 500 as index funds that received cash in the Anheueser buyout needed to put that money back into the S&P. That rebalancing may have been behind all of the late rally yesterday – and considering the quick return to ugliness today, that line of reasoning makes sense.
Tags: General Market Commentary · S&P 500
2 responses so far ↓
1 Jon Eeles // Nov 19, 2008 at 11:40 am
The S&P 500 cash closing low of 27th October is still intact. A quick trip to below 817 followed by a strong reversal would complete an ending diagonal triangle from 1044. This is still a potentially bullish set up.
2 AC // Nov 19, 2008 at 6:00 pm
For the SPX diagonal to look “right” in my opinion, I think yesterdays rally should really have taken out the 917 high for about 930 before heading down. The fact that the rally failed, makes me more concerned about the DIA which looks more like a continuation (4th wave) triangle in a contracting 78-99 range before lower. This would have finished on 13th at 89.49 + put us now in a 5th wave off August highs. The final low would be closer to 65 than current levels. I also find there’s no such thing as a quadruptle bottom. So most likely with DIA now back to 80 for a 4th test, it should give way for a good decline … time will tell … guess the trick would be only to buy if a post-diagonal rally is well under way rather than buying a falling market with risk of acceleration
You must log in to post a comment.