Sunday, January 4, 2009

The Rally Looks Very Corrective; Jan. 3, 2009

The rally from early last month looks very corrective and is waning in underlying strength already. Although it appears the market will continue to rally in the coming days into the 950-1000 S&P range, it can fall at any time, and it should fall hard when it does. With that in mind, I'd rather just short rallies instead of trying to get long this market and against the larger trend, which I see as down still.


Michael K. said...

Hey Todd, what is your thought on oil and gold? I think gold could go as high as $900 before going down to $600.

Todd S said...

I don't study oil, but I can GUESS that it's going to drop to the low $30s if not break into the $20s. That might be a good buying opportunity. As for gold, I study that much more and I'm very bearish on that in 2009 as long as it doesn't make a new high above $933 (I think that's the level). So I'm very bearish on gold and today's sharp reversal may mean the downtrend has resumed. It should hit the low $600s before forming any significant bottom.