(Click on the above charts to see a larger version.)
The market is currently at a critical juncture. It is knocking at the year high set back in mid-October. (The main-stream press told us on Thursday that the market set a new yearly high. Well – that is sort of correct and sort of not correct. It was a new high on a close basis but not on an intra-day basis. Given a choice, the mainstream press will almost always opt for the more optimistic of two choices where the market is concerned.)
Technically, the market is giving mixed signals – some bullish and some bearish. Given that situation we can expect at least a short term pull-back. Then we may be able to re-assess the situation. A decisive break above the mid-October high would be very bullish. A break below the 4500 area would be bearish. That leaves a lot of wiggle room if the market does decide to pull back.
Long-term, the trend is still up. The past 2 ½ months appears to be a consolidation at the highs of the year. Such a consolidation normally breaks to the upside. So the weight of evidence in the medium-to-long term is still with the bulls until proven otherwise.
The Decade Trend and the Presidential cycle suggest a reversal to the downside sometime in the first quarter of 2010. We’ll continue to monitor that scenario closely. Remember – that is just a scenario – not a prediction. And watch for Black Swans – they can appear at any time.
No comments:
Post a Comment