Monthly Archives: December 2008

Making the Case for the Next Leg Up

23
Dec 08
Back on November 20 and 21, just before Thanksgiving week, the S&P 500 completed a sharp plunge with a base in the 750 area. After a dramatic five-day rally, it tested 820 a few times for about a week, and then jumped again. Since then, it’s been testing 850, with even last Tuesday’s big jump just part of the consolidation pattern, building up energy for the next move. I still think the next move will be up, partly because of the stair-step pattern of the interim energy levels that are being tested. If that’s right, we should see a big...

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A Rally Into Next April

11
Dec 08
In spite of today’s “no bailout” decline, my Flash Alert on Monday still looks like a good call: The rally into next April has begun. I want to see the S&P 500 recapture and break away from the 895 support level, and start dealing with getting through 944. That would “lock in” the November 21 intraday low at 741 as the low for the last leg down. The closing low came the day before at 752, so a close over 903 equals a gain of 20% from the closing low — the very definition of a bull market. We already...

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Multi-Month Rally Appears to be Underway

08
Dec 08
In last Thursday’s Radar Report I said: “At some point, the knee-jerk reaction to negative news that should be no surprise to anyone will stop. When that pattern breaks, I still think there is a spectacular move to the upside in the works as the sideline cash and newbie short sellers and put buyers learn there is no such thing as free lunch.” On Friday, the worst jobs report in 34 years triggered another knee-jerk reaction down 27 points on the S&P 500 to 818 at 10:45 a.m. But then a powerful reaction based on nothing visible shot the S&P...

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Two Important Questions

04
Dec 08
Yesterday, the S&P 500 climbed back over the strong 850 energy level to close yet again at 870.  In the last seven weeks we’ve seen this number several times, starting on October 10 when the S&P plunged through it to 840, and then rallied sharply back above it to close at 899.  The 870 level was back as part of the intraday low range on October 16 and again a week later on October 23.  It gave way on October 17, when the S&P closed at 849, but was part of the rally energy the next day that saw the...

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