Cheerleaders on a Losing Team….with update
Negativity is running high at CNBC. For a station that led the bubble making for many years, we now see a lot of whining. Maybe Phil Gramm was right. What we know now is that in terms of time we are 1/3 through the unravelling and in terms of points we are 2/3 through the unravelling. For us, our guess is that by late 2010 we should see 440 on the S&P. That leaves a lot of time and market action to cover. So keep your position levels low, we are continuing to run between 35 and 75 percent cash in the two portfolios.
Today the market in technical terms is flagging down, and needs to be watched. If it catches we will move our long position up quickly in the Aggressive Portfolio for a short term rally to 1060 in the S&P. If it doesn’t catch, there is a good chance we will test the 840 low. This is a traders market.
Going back to the whining, we would rather see that than enthusiasm, it means we are nearer a trading bottom.
Update at 8:37 AM
The S&P flag trading pattern would breakout to the downside at 899 and on the updside at 966, that leaves trading gravitating around the 933 swingpoint.