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 !!!

Thursday, October 30, 2008

Stock Market -- Technical

The SP 500 has come out from its crash trend line. The much
broader Value Line Arithmetic, a good 1700+ issue proxy for
"the average stock", exited its crash trend line today. However,
and based on closing prices, the SP 500 has yet to break out from
a far less dramatic downtrend line running from 10/13. So, trend
line-wise, the market is not out of the woods quite yet in the
short run.

The SP 500 has been showing basing at intraday 835-840 since
10/10, a good sign. The short term momentum oscillator is
improving, although still negative. The market is now moderately
oversold near term at -3.8% to the 25 day m/a. Note , however,
that rallies have only proceeded from deep oversolds of more than
-15% since the crash kicked off in Sept. Continuation of the latest
advance off the 10/27 closing low of 848 in the days ahead would
be another positive sign, indicating the market can move ahead
without having to first fall to agonizingly deep oversolds.

The 10 day m/a is starting to stabilize, while the 25 day m/a is
still in retreat. I like set ups when the market and the 10 day m/a
move up through the 25. You can be whipsawed here, but not
that often.

Intermediate and long term indicators remain negative and
deeply oversold. Since these are primarily early stage trend
following indicators, turns would not come quickly given the
depth of the oversold readings.

On balance, the market remains treacherous although there
has been some short term improvement.

SP 500 daily chart is here.

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