Wednesday 1/16/08 comments

The S&P market is currently bounded by a trading range of 1363 to 1461 and at the moment is close to the bottom of the range.  For me a close below 1363 would signify the verification of a bear market and a quick move to the 1270 area, the 20 percent decline area near the 2006 lows,  but investors are still trying to “Pick Bottoms” and rallies to the top side of the range are certainly possible and probable first.

All the action over the past six months has just been staging and investors still have good gains over the past two to five year time frames.  The defensive posture I have been talking about for a long time will start to become relevant if the 1460 area cap holds the market on rallies over the next few weeks.   Gold and oil have topped and probably grains also. 

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