Pivotal Period Approaching
If one looks back at the patterns of market action that led to the 2008 waterfall, two periods stand out, one starting with our comments of May 19, 2008 and the second with the secondary rollover in mid August 2008. The current market is developing as the secondary rollover off the April 30, 2010 high, ie April 30, 2010 is comparable to May 19, 2008. Thirteen weeks separated the May-August 2008 pattern. This week is thirteen weeks from the April 2010 bounce high.
Market watchers comments this week are echoing our earlier comments on the disconnect between the economy and earnings.