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, August 31, 2010

Stock Market -- Technical

We are set to steer into Sept., so let's take a look. The market is in a
clear short term downtrend. Moreover, the chart shows the SP 500
was not been able to push up through a downtrending 10 day m/a
in August -- not a good sign. The market is moderately oversold, and
it has been able to rally off this degree of oversold going back to
Jul. '09 -- not a bad sign. The "500", based on closing prices (and
factoring in the "flash crash"earlier in the year), is at the top of a
1020 -1050 support zone that goes back to Oct. 2009. The market
is in a reasonable position for a bounce, but should one ensue, it
would need to take out the 10 day m/a on the way up at the
minimum to attract much interest.

My primary longer term measure for the market has been trending
down since early in 2010, reflecting deteriorating price momentum
measured weekly. It turned positive only briefly in the early part
of the year when the market rallied. I am watching it closely now
because a rally in Sept., should one eventuate, would turn this
historically very useful measure positive. That would be a rather
amusing development, because even many of the few advisory
bulls out there have all but conceded Sept. /Oct. to the bears.
Since the market often does what inflicts the most painful
surprise to the the greatest number, a positive turn in the weeks
straight ahead would be a delight and present a nice opportunity.
Wishful thinking, maybe, but not without precedent.

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