About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Monday, July 14, 2008

Stock Market -- Technical

The market's oversold condition has deepened over the first couple
of weeks in July. As pointed out in the 6/27 comment on the
market, I have, as a gentleman of leisure, opted to spend quality
time out on the deck with the occasional drink and cigar. I have
stayed away from the market, and I may do so further. The
break below important support in late June reaffirmed the bear
market and, as subsequently mentioned, set up the possibility of a
breakaway downleg, which we have been experiencing. The
failure of the bulls to sustain a rally in recent weeks plus the
absence of heavy downside volume relative to upside volume
leaves me cold -- concerned that traders are looking for a
demonstrative capitulation to the downside before stepping in
to rally the market. In short, we have a breakaway downleg that
could spike down on heavy downside volume before this move
completes.

Hunches can get you into trouble as easy as not, and since I
have no trading capital in the market, I would like to find a spot
to play a rally from a deep oversold. But I am not going to push it
and instead will take my cue from the action ahead.

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