Yesterday I suggested that we take note that the weakish market
uptrend had rolled over. I did not anticipate such a fast and forceful
drop would result today. The SP 500 closed out around 1236, and
that's close enough to the low test zone of 1200 - 1215 running back
through late 2005 to invite bear inquiries and to test it out again.
I do not often try to play the commentator, but it appears the weak
action in the market since the sharp rally peak in May of this year
suggests investors are concerned the tax rebates have not been
effective enough in stimulating the economy and that the still large
credit quality yield spreads in the fixed income market are garnering
negative attention re: the financial system.
At any rate, if we do see a test of the lows in that 1200 - 1215 bracket
on the "500", there would be a deep enough short term oversold to
make the sitiuation rather interesting although risky.
- Peter Richardson
- 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 !!!