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Are We There Yet?
March 26th, 2009 at 1:49pm · 3 Comments
My assessment last evening that a move above the net-live buy level of 816.25 would buy some more time for the rally was accurate. But now, it seems like this cat-of-nine-lives bull run is nearing its end. The 60 minute tick cycle-trap has not only diverged, but is now in negative territory. And the same for the 135 minute modified DMX. THat is now reading negatve numbers as well. One more push up through 830 is very possible, but I think that would really be a pretty good opportunity to get on the bear side.
Tags: General Market Commentary · S&P 500
3 responses so far ↓
1 hindenburg_omen // Mar 26, 2009 at 2:17 pm
chris, i wholeheartedly agree with you re fatigue
emini and s&p cash have been loitering at the top of their trend lines for some time, with the cash looking especially like a scalloping top, and the upmoves have been so violent the past 2 days that they bulls can’t sustain this much longer. buyer exhaustion looks imminent, unless the bulls get some news or a new thesis.
i think the new moon today is fueling their optimism, too.
2 bansal.pratik // Mar 26, 2009 at 2:42 pm
but the solunar model saying the contrary….IT SAYS HIGH ON APRIL 10…… plz explain
3 rich // Mar 26, 2009 at 4:32 pm
First I should say that I am still a convinced bear at current valuations and I think that prices have a lot further to fall before this bear market is done.
That said, I have been expecting a powerful bear market rally for months now & this looks like it. Most likely it has at least another 5% to go before topping out and possibly another 15%.
Prices are seriously overbought in the very short term though and I am cautiously shorting in the expectation that we will see falls Friday & probably Monday. If I’m wrong and the S&P keeps rising, I would expect a retracement to 830 on the S&P within a week in any case, so I would expect not to lose money regardless.
If the market falls 5% or so over a couple of days, we could then see the next leg up, for a peak of 860 to 940 before April 10th. The market won’t rise continuously until then, there will be pullbacks and we look very overdue for one right now.
If I’m right then this will set up a hell of a shorting opportunity by April 10th, as the market could fall from there to retest the 750 level.
Even after that, this bear market rally may still have legs. In the longer term this market remains very oversold, having fallen a very long way in such a short time. The power of wishful thinking should never be underestimated either!
BTW great blog Chris. What will be the cost of subscribing?
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