Monday, December 8, 2008

Rally to 950-975 S&P Looks Probable; Dec. 8, 2008

Boy what a snoozefest in the market today. Nothing really changed from the last chart I posted so I decided not to post another one. The rally looks corrective as it's just too fast on too bad of news with contracting NYSE breadth (see prior chart below). Plus, gold and the euro have been tracking the stock market very closely and both are set up for major declines soon. So even though more stock market rallying is on the way, it's best to keep in mind that I believe it's all corrective and should remain below 1000 in the S&P. (FYI: I'm currently short silver at $10.03 with a stop at $11.00).

With all that said, the market most likely won't rally in a straight line up anymore. It's already done that, and now it's going to have to work a little harder for its gains. I expect a little pullback tomorrow, perhaps to the S&P 880-890 or so before more rallying occurs. Most likely I will just start moving my portfolio bias to short again as the S&P approaches the 950, and will greadually get more and more short as it works its way towards 1000.

Once the market tops, another major declining phase should be underway again. Once it starts, I'll look for targets.

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