Saturday, June 6, 2009

S&P 500 Update Video

This video covers the stock market with focus on the importance of the 950ish level on the S&P 500 as resistance as well as analysis of fund flows and investor opinion surveys.

There are 2 main scenarios here: either this rally is the first move up in a new bull market, or it is a middle/late stage glorified bear market rally. In either case, by historical comparison of past similar occurrences and their duration, % advance, rate of gain, etc, this rally is long in the tooth. Also, even IF this is a new bull market, the corrections after the first rally of a new bull market have tended historically to be very deep (about 75%ish) when the bear market was very severe (say 50% or greater decline).

If you are considering entering long-term investments, my suggestion is to not be fooled with all the recent media hype and technical excitement about the market regaining the 200 day MA, etc. Wait for a more substantial and longer duration correction and then consider if the time looks right.


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