Powered By Blogger

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 !!!

Tuesday, April 07, 2009

Stock Market -- Technical

The current rally is a bit more than a month old. As discussed in
posts over the past two weeks, it has exhibited a rocket trajectory
and has twice vaulted to exceptional short term overbought
readings. Even after today's sharp sell off, it remains moderately

It has been a tradeworthy rally nonetheless, and remains of interest
to me, since it has broken out from the deep downtrend lines that
bounded the action over the past 6 months. The SP 500 closed
today at 816, and the market will continue to hold my interest as
long as it stays above 790 in the days ahead. A sharp break below
that level would indicate a trajectory of more questionable import.

Only the brain dead have missed the notion that the rally did get
ahead of itself, and my e-inbox is full of warnings that it's earnings
season and that dismal reports will threaten to smack it down.

Ah, but in my perverse way, I find that the inability of sellers to
crush such a high flown market overbought signifies a change of
some sort is afoot. Going back to late 2007, short term overboughts
have been treated in a rude, quick fashion from far less lofty levels.

So, I will keep the focus light turned on, and absent a break of
consequence below SP 500 790 - 800 over the next week or so,
will look for logical completion of the rally within 850 - 900 over
the course of April.

No comments: